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Do dividends matter? Provide theoratical literature, empirical evidence, examples and relevant theories etc.
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Solved in 2 steps
- Using the agency theory, explain how dividend policy is impacted positivley.Discuss the various arguments put forward by different schools of thoughts about dividend policy ie dividend irrelevance, dividend relevance, mid-roaders schools as well as the role of market imperfections in debate1 The issue of dividend policy and its impact on firm value has led to the publication of various theories. Provide a review of these theories.
- Argument if dividend policymatters, backed by academicliterature. You are required to demonstrate knowledge andunderstanding of the arguments FOR andAGAINST the Dividend Relevance point of view.You need to present literature review as evidenceof researching academic literature for variouspoints of views/theories regarding dividends.After writing about both dividend relevance andirrelevance you need to offer a conclusion of yourown.The terms “irrelevance,” “dividend preference”(or “bird-in-the-hand”), and “tax effect” havebeen used to describe three major theoriesregarding the way dividend payouts affect afirm’s value. Explain these terms, and brieflydescribe each theory.Please answer the question as follow? Profit Maximize and Wealth Maximize, what is difference? Explain. Definition and important of financial management. Explain.