This page of the essay has words. Download the full version above. Paying large dividends reduces risk and thus influence stock price Gordon, and is a proxy for the future earnings Baskin, Volatility is the rate of change in the price of a security over a given time period and, consequently, the greater the volatility the greater the risk of substantial gain or loss.
Literature Review of Corporate Governance and Dividend Policy - Dissertation Example
Dividend policy: a review | Emerald Insight
In Saudi Arabia, dividend policy is an imperative tool because most companies retain close to percent of their earnings in dividends. In this economy, firms are majorly funded by bank loans and thereof, there exists no capital or income gains taxes. Some of the most identifiable factors influencing dividend policy of both non-financial and financial companies. The optimal dividend policy of a firm may be defined as the one that increases shareholders wealth by the greatest amount. It is therefore necessary, to understand the nature of the relationship between dividend and value of the firm.
Summary of Literature Review on Dividends
It will synthesize and evaluate the data, and explain the importance of the topic to establish ways to cite statistics how social support The study reveals that as per dividend irrelevance theory dividend policy has no influence on value of the firm for the reason of homemade dividend according to dividend relevance theory, value of the firm is influenced by dividend policy because of certainty, information content and clientele effect; liquidity, availability of worthwhile projects, availability of alternative funds, profitability, growth, leverage, reaction of market to dividend reduction, ownership This literature review will explore the academic readings, that help assist identity key issues relating to a criminology perspective of alcohol related problems.
Finance literature has two different views on the dividend policy. One view suggests that dividends are irrelevant for value whereas the other view states that dividends have implications for value. The original theory of irrelevance of dividends for value was empirically tested by DeAngelo and DeAngelo and the authors rejected the model that was suggested by Miller and Modigliani The research demonstrated that the payout policy was relevant and investment policy was not the only determinant of firm value.