DIVIDEND POLICY

btharol

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DIVIDEND POLICY

What to do with excess cash?
# Types of dividends
# Theories of optimal dividend policy: dividend puzzle
# Some practical considerations

Definition: Dividend is the distribution of value to shareholders.
Dividend Policy: What happens to the value of the firm as dividend
is increased, holding everything else (capital
budgets, borrowing) constant. Thus, it is a trade-off
between retained earnings on one hand, and
distributing cash or securities on the other.
 

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