Why did MM refer to the Gordon–Lintner dividend argument as the bird-in-the-handfallacy?

Q: How does the market react to unexpected dividend changes? What does this tell us about dividend…

A: Dividend: It refers to the surplus amount paid by the company to its shareholders. It is considered…

Q: What is the major reason for a forward stock split?

A: Stock Split: Stock Split is a scheme in which a company’s total number of shares outstanding will…

Q: Is it because: a. The capital gain will be different because the dividend did not change. or…

A: Capital gain can be calculated s follows: Capital gain=(Sale price - Cost price)Cost price* 100

Q: hat is the rationale for valuing a firm using the two-stage dividend discount model versus other…

A: Step 1 The two-stage approach is frequently used to assess the intrinsic value of a stock issued by…

Q: Theory believes that dividend or capital gains has an impact on the price of the stock Select the…

A: Dividend relevance theory:- This theory says that the dividend or capital gain paid by the firms is…

Q: In what circumstances is it most important to use multistage dividend discount models rather than…

A: Multi-stage dividend discount model is used to value companies which are in its nascent stage and…

Q: Write Example for preference dividend?

A: Formula: Preference dividend = Preference shares x Preferred dividend rate

Q: Discuss the ethics of dividends and illustrate how dividends and related issues (e.g. dividend…

A: Business is the part of the society and gets various resources from society to conduct its business.…

Q: What is the primary motivation for a forward stock split?

A: Here is the Answer

Q: How had dividend policy been used by firms as a “signal”. Why is it necessary for firms to send such…

A: Dividend is paid by the firm to the investors as a return. It can be paid in cash or stock. Dividend…

Q: Discuss the main contribution of Modigliani and Miller to financial theory in terms of their general…

A: Dividend decision refers to the decision which helps in deciding the proportion of earnings which…

Q: According to Walter (1963) should a firm pay dividends? Explain why Walter comes to this conclusion.

A: As per the Walter’s model on dividend policy, dividends are relevant and have a bearing on the…

Q: What are the similarities and differences between an overall rate and an equity dividend rate?

A: Answer: Equity is nothing but the difference between asset owning values and liabilities against…

Q: Describe the nature of preference dividend and equity dividend with your own suit

A: Answer: Preference dividend is the dividend that are given on preference shares and equity dividend…

Q: what is the primary purpose of a stock split?

A: The main purpose of a stock split is to increase the liquidity of the stock. hence the number of…

Q: Which of the following are different approaches for estimating the intrinsic value of a common…

A: There are many different types of valuation of stock of company.

Q: three real-world factors that may cause one dividend policy to be preferable to another.

A: 1) This states about famous Miller & Modigilani Dividend irrelevance proposition . As per MM…

Q: It is the board that decides whether a dividend is to be paid or not select an option False True

A: Dividends are payments provided to a corporation’s shareholders when the company makes a profit.…

Q: What is the optimal dividend policy with taxes when the dividend ta capital gain tax rate? Why does…

A: Capital gain tax refers to the tax or mandatory charged levied by the government over the profit…

Q: Is this statement true or false? Give a reason for your answer. " Relevant or not, frequent changes…

A: Dividend policy is a policy that determines the division of earnings into dividend and retained…

Q: In your opinion, what is the most compelling justification for a forward stock split?

A: This question explains about the most compelling justification for a forward stock split

Q: Why is the ex-dividend date important to stockholders? If a stock is sold on the ex–dividend date,…

A: The ex-dividend date is important to stockholders as it is the date on/after which a new buyer of…

Q: Indicate whether its TRUE or FALSE. Then give an explanation. Firms concerned with the sharemarket…

A: Dividends often tend to be sticky in most cases because companies are reluctant to change dividends…

Q: What is the character of Jack's distribution (amount of dividend, return of capital, capital gain)?…

A: Stocks can be defined as the portion of ownership in the capital of the corporation. It can be in…

Q: Define Gordon dividend discount model?

A: The Gordon, dividend discount model, also recognized as a version of the dividend discount model, is…

Q: When does reverse stock split occurs?

A: Stock split means reducing the face value of single share. For example, A share of $100 will be…

Q: Why is the ex-dividend date important to investors?

A: One business day before the record date of a stock is referred as ex-dividend date.  Whenever a…

Q: What is the difference between book value per share of common stock and market value per share? Why…

A: Book Value per share: Book value per share can be calculated as follows: BVPS =   Total Equity −…

Q: In your opinion, what is the most important reason for a forward stock split?

A: This question explains about the most important reason for a forward stock split

Q: Discribe the nature of preference dividend and equity dividend with your own suitable examples?

A: Preference dividend and equity dividends are paid to preference and equity shareholders as a return…

Q: What is the Dividend Discount Model? What are some of the limitations of the Dividend Discount Model

A: There are several method on the basis of which the estimated required rate of return can be…

Q: What is low-regular-dividend-plus-extras policy?

A: There are different investment policies available for investors which give returns and advantages…

Q: he dividend discount model considers all dividend payments until infinity. Do we have to worry about…

A: Dividend discount model is used quite extensively in valuation of stock and we need to consider all…

Q: Describe the three theories that have beenadvanced regarding whether investors in theaggregate tend…

A: Dividend Payout Ratio measures the total amount of dividends which is paid out to shareholders…

Q: Most prevalent types of dividend policy are – i. Regular dividend policy ii. Stable Dividend Policy…

A: We’ll answer the first question since the exact one wasn’t specified. Please submit a new question…

Q: a. Critically examine dividend irrelevance theory of Modigliani and Miller and Bird in Hand Theory…

A: Note:  As per the terms, I am solving the first question only. Please repost the remaining question…

Q: What is a reverse stock split?

A: Stock split: Stock split refers to the dividing one share into two of more shares. It is usually…

Q: How are share repurchases an alternative to dividends, and why might investors prefer them

A: The share repurchase is the alternative to dividends because when a company repurchases it’s issued…

Q: which between the two is better for you, the Book Value per Share approach or the P/E (Price…

A: Book value per share approach and Price Earnings (P/E) approach are useful techniques to evaluate…

Q: Explain Gordon Dividend Discount Model?

A: Dividend Discount Model (DDM) is also referred to as Gordon dividend discount model. It is used to…