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Fundamentals of Financial Manageme...

14th Edition
Eugene F. Brigham + 1 other
ISBN: 9781285867977

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BuyFindarrow_forward

Fundamentals of Financial Manageme...

14th Edition
Eugene F. Brigham + 1 other
ISBN: 9781285867977
Textbook Problem

What is meant by catering theory, and how might it impact a firm's dividend policy?

Summary Introduction

To explain: catering theory and how it impact firm’s dividend policy.

Introduction:

Dividend Policy:

It is the rules and regulations or protocol, which a company sets to share its earning with its shareholders. Dividend’s payment include payment to be made legally as well as financially.

Explanation
  • A theory is developed to pay dividends as per the investor demand. Investors are catered by manager, by paying them dividend when the stock price premium is put by investorson payers and not paying when non-payers are preferred by investors...

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Fundamentals of Financial Management, Concise Edition (with Thomson ONE - Business School Edition, 1 term (6 months) Printed Access Card) (MindTap Course List)