Dividend

Why Do Firms Pay Dividends? International Evidence on the Determinants of Dividend Policy* DAVID J. DENIS** Krannert School of Management Purdue University West Lafayette, IN 47907 djdenis@purdue.edu IGOR OSOBOV Georgia State University Department of Finance Atlanta, GA 30303 iosobov@gsu.edu May, 2007 We thank Yakov Amihud, Harry DeAngelo, Linda DeAngelo, Diane Denis, Jim Hsieh, Omesh Kini, Erik Lie, John McConnell, Lalitha Naveen, Raghu Rau, Steve Smith, Jeff Wurgler, an anonymous referee

of bank dividend policy: revisited John Theis and Amitabh S. Dutta D. Abbott Turner College of Business, Columbus State University, Columbus, Georgia, USA Abstract Purpose – The purpose of this paper is to examine the Dickens et al. model of bank holding company dividend policy. They identified five explanatory factors in a sample of bank holding companies (BHCs). Banking companies typically pay larger dividends and more often than industrial firms. Investors often look at the dividends as being

Chartered Accountant of India, dividend is defined as “a distribution to shareholders out of profits or reserves available for this purpose”. The financial manager must take careful decisions on how the profit should be distributed among shareholders. It is very important and crucial part of the business concern, because these decisions are directly related with the value of the business concern and shareholder’s wealth. Like financing decision and investment decision, dividend decision is also a major

Dividend is that part of earning which is distributed among the shareholders. The decisions about when and how much earnings should be paid as dividends is part of the firm 's dividend policy. It is irrefutable that dividend policy is controversial issue as some people opine that dividends are relevant for the valuation of company and others think that dividend does not effect the market price of shares and valuation of firm. Besides this, the market where long term investment like share bonds are

Dividend Policy – Review of Theories Introduction Dividend policy refers to the payout policy that a company follows in determining the size and pattern of distributions to shareholders over time. Distribution of cash to shareholders by either payment of dividends and repurchase of shares has been a hotly debated topic amongst scholars. There exists many answers to an optimal dividend policy that satisfies both shareholders and management. With this the company generally faces two operational choices

Theory 2.1.1 Dividend 2.1.1.1 Definition of Dividend According to investopedia, dividend is a distribution of amount of company’s earnings that have been decided by board of directors, to their shareholders. Dividends are cash payments that corporations make to their common stockholders (Gallagher and Andrew, 2013). Dividend per share can be calculated as follow: DPS=(Cash Dividend)/(Outstanding Shares) 2.1.1.2 Types of Dividend Based on Accounting Tools, There are five types of dividend. Cash Dividend

Dividend Irrelevance Theory- Modigliani & Miller (1961) Since the emergence of the so-called irrelevance theorem by Miller and Modigliani (1961), many corporations are puzzled about why some firms pay dividends while others do not. They were the first to study the effect of dividend policy on the market value of firms by assuming that there are no market imperfections. Miller and Modigliani (1961) proposed that divided policy chosen by a firm has no significant relationship in as far as the market

respect Dividend Policy: the Relevance Theories, and the Irrelevance Theories. Explain briefly" Dividend is that portion of net profits which is distributed among the shareholders. Every company would have their own dividend policy. Some may have a kind of policy where they have a fixed amount of dividend for a number of years, some have a constant payout ratio, other can have a constant dividend per share , some may give no divided at all etc. However some theorist believe that dividend policy

A dividend tax is an income tax paid on the earnings from a corporation that is distributed to its shareholders. Dividend payments are treated as ordinary income, and they are taxed as if the taxpayer had earned income through active work. Presently, there is much controversy surrounding dividend tax. The government taxes dividends twice: It first taxes corporate income, then taxes the same income again when shareholders receive dividends paid out of corporate income. The double taxation raises

Dividend policy theories Dividends are the returns that ordinary shareholders obtain from the firms in which they made their investments in form of equity. They are paid periodically and may vary from year to year depending on cash requirements of the firm as well as the profitability level of the firm. Dividend policy shows the rationale through which firms use to allocate the profits of a firm in payment of dividends to the shareholders of the firm. Dividend may be paid in cash or through bonus