This theory argues that there is no optimal dividend policy because a firms dividend policy does not affect the value of the firm.
According to this theory, an announced dividend payment that exceeds investors expectations is interpreted to be good news and should be expected to increase the price of the firms common stock, whereas an announced dividend that is less than investors expectations is construed as bad news and should be expected to decrease the firms share price.	Residual dividend policy
If a shareholder owns a firms shares on this date, he or she will receive the firms next declared dividend.	Holder-of-record date
According to this policy, the firms dividend is calculated as the difference between the firms net income and the retained earnings needed to finance the firms optimal capital budget.	Residual dividend policy
Under this activity, a firm with 100,000 shares of outstanding stock, each trading for $44 per share, doubles the number of shares outstanding, causing the per-share market value of the shares to decrease to $22.	Stock split
If a firms net income varies from year to year, this dividend policy exposes a shareholder to uncertainty regarding the amount of dividends to be received each year.
This program automatically uses a shareholders dividends to acquire additional shares of a firms outstanding or newly issued stock.	Dividend reinvestment plans
This dividend policy maximizes the value of a firm.	Optimal dividend policy
This type of earnings distribution takes the form of the payment of additional shares of the paying firm, rather than the payment of cash.	Stock dividend
An earnings distribution activity in which a firms net income is used to increase the treasury stock holding via purchases in the financial markets.