Dividend irrelevancy theory: Difference between revisions
From ACT Wiki
Jump to navigationJump to search
imported>Doug Williamson (Layout.) |
imported>Doug Williamson (Classify page.) |
||
| Line 18: | Line 18: | ||
* [[Clientele]] | * [[Clientele]] | ||
*[[Signalling]] | *[[Signalling]] | ||
[[Category:The_business_context]] | |||
[[Category:Corporate_finance]] | |||
[[Category:Investment]] | |||
[[Category:Financial_products_and_markets]] | |||
Revision as of 22:38, 23 April 2020
In financial theory dividend payments and policies should be irrelevant when financial markets are efficient.
But in practice decisions about dividend levels are important because of:
- Their informational content. This informational content is known as signalling.
- The potential to move closer to, or away from, a firm's optimal capital structure.
- Possibly, clientele effects.
