《财务管理》（英文版） 11.ppt

Chapter 18 Dividend Policy Dividend Policy Passive Versus Active Dividend Policies Factors Influencing Dividend Policy Dividend Stability Stock Dividends and Stock Splits Stock Repurchase Administrative Considerations Dividends as a Passive Residual The firm uses earnings plus the additional financing that the increased equity can support to finance any expected positive-NPV projects. Any unused earnings are paid out in the form of dividends. This describes a passive dividend policy. Irrelevance of Dividends MM contend that the effect of dividend payments on shareholder wealth is exactly offset by other means of financing. The dividend plus the “new” stock price after dilution exactly equals the stock price prior to the dividend distribution. Irrelevance of Dividends MM and the total-value principle ensures that the sum of market value plus current dividends of two firms identical in all respects other than dividend-payout ratios will be the same. Investors can “create” any dividend policy they desire by selling shares when the dividend payout is too low or buying shares when the dividend payout is excessive. Relevance of Dividends Uncertainty surrounding future company profitability leads certain investors to prefer the certainty of current dividends. Investors prefer “large” dividends. Investors do not like to manufacture “homemade” dividends, but prefer the company to distribute them directly. Relevance of Dividends Capital gains taxes are deferred until the actual sale of stock. This creates a timing option. Capital gains are preferred to dividends, everything else equal. Thus, high dividend-yielding stocks should sell at a discount to generate a higher before-tax rate of return. Certain institutional investors pay no tax. Relevance of Dividends Corporations can typically exclude 70% of dividend income from taxation. Thus, corporations generally prefer to receive dividends rather than capital gains. The result is clienteles of investors with different divid