Question
a.(1)What is meant by the termdistribution policy? How has them ix of dividend payouts and stock repurchases changed overtime?(2)The termsirrelevance,dividend preference, orbird-in-the-hand, andtaxeffecthavebeenusedtodescribethreemajortheoriesregardingthewaydividendpayoutsaffectafirmsvalue.Explaintheseterms,andbrieflydescribeeachtheory.(3)Whatdothethreetheoriesindicateregardingtheactionsmanagementshouldtakewithrespecttodividendpayouts?(4)Whatresultshaveempiricalstudiesofthedividendtheoriesproduced?Howdoesallthisaffectwhatwecantellmanagersaboutdividendpayouts?b.Discuss(1)theinformationcontent,orsignaling,hypothesis,(2)theclienteleeffect,and(3)theireffectsondistributionpolicy.
a.(1)What is meant by the termdistribution policy? How has them ix of dividend payouts and stock repurchases changed overtime?(2)The termsirrelevance,dividend preference, orbird-in-the-hand, andtaxeffecthavebeenusedtodescribethreemajortheoriesregardingthewaydividendpayoutsaffectafirmsvalue.Explaintheseterms,andbrieflydescribeeachtheory.(3)Whatdothethreetheoriesindicateregardingtheactionsmanagementshouldtakewithrespecttodividendpayouts?(4)Whatresultshaveempiricalstudiesofthedividendtheoriesproduced?Howdoesallthisaffectwhatwecantellmanagersaboutdividendpayouts?b.Discuss(1)theinformationcontent,orsignaling,hypothesis,(2)theclienteleeffect,and(3)theireffectsondistributionpolicy.
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Personal Finance
Authors: Jeff Madura
7th Edition
0134989961, 978-0134989969
