Question

What is dividend? Explain the various dividend theories. Discuss the factors influencing dividend policy.

27 Oct 2021
Answer :
Word Count : 589

Dividend and Dividend Theories:

Dividend:
A dividend is a distribution of profits by a corporation to its shareholders. It is a way for companies to share their earnings with the owners (shareholders) of the company. Dividends are usually paid in cash, but they can also be distributed in the form of additional shares of stock or other property.

Various Dividend Theories:

1. Bird-in-the-Hand Theory:
   - Propounded by Myron Gordon and John Lintner, this theory suggests that investors prefer current dividends over future capital gains. Investors believe that a dividend in hand is more certain than the potential for capital appreciation in the future.

2. Residual Theory:
   - This theory, developed by Franco _______ ____ ________ _________ ________ _____ ____ _____ _______ ____.
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