Dividend irrelevancy theory: Difference between revisions
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imported>Doug Williamson (Link with Theoretical ex-rights price page.) |
imported>Doug Williamson (Expand to incorporate clientele effect.) |
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#Their informational content. This informational content is known as ''signalling''. | #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. | #The potential to move closer to, or away from, a firm's optimal capital structure. | ||
#Possibly, [[clientele]] effects. | |||
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* [[Theoretical ex-rights price]] | * [[Theoretical ex-rights price]] | ||
* [[Capital structure]] | * [[Capital structure]] | ||
* [[Clientele]] | |||
Revision as of 07:08, 9 February 2015
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.
