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  1. Provides of Dividend Yields for Selected Industries
  2. Provides of Setting Dividend Policy
  3. Provides of Dividend Reinvestment Plan (DRIP)"


Setting Dividend Policy & Dividends Reinvestment Plan

Lecture Outline
1. What is "distribution policy"?
2. Dividend Yields for Selected Industries
3. Do investors prefer high or low payouts?
4. What's the "clientele effect"?
5. What's the "information content," or "signaling," hypothesis?
6. What's the "residual distribution model"?
7. Using the Residual Model to Calculate Distributions Paid
8. How would a change in investment opportunities affect dividend under the residual policy?
9. Advantages and Disadvantages of the Residual Dividend Policy
10. Advantages and Disadvantages of Stock Repurchases
11. Setting Dividend Policy
12. Stock Dividends vs. Stock Splits
13. When should a firm consider splitting its stock?
14. What's a "dividend reinvestment plan (DRIP)"?
15. Open Market Purchase Plan
16. New Stock Plan

A dividend is a distribution paid to shareholders. Dividends are declared (i.e., authorized) by a corporation's board of directors, whose actions may require approval by shareholders (e.g., in most of Europe) or may not require such approval (e.g., in the United States). Shares trading ex-dividend refers to shares that no longer carry the right to the next dividend payment. The ex-dividend date is the first date that a share trades without (i.e., "ex") this right to receive the declared dividend for the period.

All else holding constant, on the ex-dividend date the share price can be expected to drop by the amount of the dividend. In contrast to the payment of interest and principal on a bond by its issuer, the payment of dividends is discretionary rather than a legal obligation and may be limited in amount by legal statutes and debt contract provisions. Dividend payments and interest payments in many jurisdictions are subject to different tax treatment at both the corporate and personal levels.

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Setting Dividend Policy & Dividends Reinvestment Plan

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File Type: PowerPoint (ppt)

File Size: 442 KB

Number of Slides: 31 (includes cover, transition slides)

Related Topic(s): Dividend Yield

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Initial upload date (first version): Jul 24, 2022
Most recent version published: Jul 25, 2022

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