Dividend irrelevancy theory: Difference between revisions
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imported>Doug Williamson (Align with course materials - linked to Signalling) |
imported>Doug Williamson (Add link.) |
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== See also == | == See also == | ||
* [[Dividend]] | |||
* [[Lintner]] | * [[Lintner]] | ||
* [[Residual theory]] | * [[Residual theory]] | ||
Revision as of 21:49, 12 November 2016
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.
