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MBM018 Corporate Finance - Chapter 10 (Background on Dividend Policy…
MBM018 Corporate Finance - Chapter 10
Background on Dividend Policy
The Dividend Process
The Dividend Payment Timeline
Types of Dividends
Measures of Dividend Policy
Empirical Evidence on Dividend Policy
Dividends tend to follow earnings
Dividends Are Sticky
Dividends Follows a Smoother Path than Earnings
Dividends Policy tends to follow firm lifecycle
There are differences in Dividend Policy across Countries
Difference in Stage of growth
Tax treatment
Corporate control
When are Dividends relevant
The underlying assumptions
Proof of Dividend Irrelevance
Implications of Dividend Irrelevance
The "Dividends are Bad" school
History of Dividend Taxation
Taxation
Institutional Investors
Tax Treatment of Dividends in Other Markets
Timing of Tax payments
Assessing Investor tax preferences for Dividends
Implications
The "Dividends are good" school
Some reasons for Paying Dividends don't measure up
Bird in hand Fallacy
Managerial interests and Dividend Policy