Lecture Wek 3(continued).docxVIP

PAGE   PAGE \* MERGEFORMAT 19 Lecture 3 continued: Dividend policy READING: BREALEY MYERS AND ALLEN CHAPTER 16 Copeland, Weston and Shastri Chapter 16 Dividend Policy, Growth and the Valuation of Shares – Miller and Modigliani, Journal of Business, 1961 Learning outcomes Understand why firms issue dividends Understand how dividend policy might affect the value of a firm Understand how dividend policy is set by firms  Dividend Policy Companies pay out cash to their shareholders in two ways: They can pay a dividend, or they can buy back some of the outstanding shares. Dividends rema