- For educators
Fundamentals of Corporate Finance (7th Edition) Edit edition This problem has been solved: Solutions for Chapter 18.4 …
The proponents of high dividend payout have put up two significant factors which support their theory: 1) the desire for current income and 2) the uncertainty resolution. Also it has been argued by Benjamin Graham and David Dodd that high dividend yield securities fetch higher value because they sell at a higher price. This argument holds true for a certain class of individual investors whom are discussed below.
Some individual investors such as retired persons and people living on fixed incomes prefer a high dividend payout and bear their taxability simply because they like the flow of current income. Also the fact which holds true is sale of low dividend stocks do not realize much income due to brokerage fees and capital gain taxes which can be avoided through investment in high dividend yield securities. Only in a hypothetical world of no transaction costs, the theory regarding low dividend yield securities and homemade dividend will hold true.
The second argument is in favor of high dividend payout is resolving the fear of uncertainty. Investors dislike nothing more than uncertainty of income. They like a continuous flow of cash on a regular basis. The Gordon growth model discounts future dividends to arrive at the current price of security. Since future dividends seem more uncertain than current dividends, the stock price of companies with a low payout ratio hoping to pay high dividends in later periods should be lower.
Corresponding textbook
- About Chegg
- Chegg For Good
- College Marketing
- Corporate Development
- Investor Relations
- Join Our Affiliate Program
- Media Center
LEGAL & POLICIES
- Advertising Choices
- Cookie Notice
- General Policies
- Intellectual Property Rights
- Terms of Use
- Global Privacy Policy
- DO NOT SELL MY INFO
- Honor Shield
CHEGG PRODUCTS AND SERVICES
- Cheap Textbooks
- Chegg Coupon
- Chegg Study Help
- College Textbooks
- Chegg Math Solver
- Mobile Apps
- Solutions Manual
- Textbook Rental
- Used Textbooks
- Digital Access Codes
- Chegg Money
CHEGG NETWORK
- Internships.com
CUSTOMER SERVICE
- Customer Service
- Give Us Feedback
- Manage Subscription
© 2003- 2024 Chegg Inc. All rights reserved.
IMAGES
VIDEO
COMMENTS
Study with Quizlet and memorize flashcards containing terms like Shareholders must approve any corporate decision that would cost more than $10,000. T/F, Because shareholders with a very small percentage of shares may not be able to travel to annual meetings, the law allows them to appoint someone else to vote their shares using a _____ authorization form.
Shareholders must approve any corporate decision that would cost more than $10,000. FALSE 2. Because. AI Chat with PDF. Expert Help. Study Resources. Log in Join. Worksheet 18.docx - Worksheet 18.4: Shareholders 1.... Pages 2. Total views 12. University at Buffalo. MGT. MGT 401. taylor92326. 5/19/2022. Worksheet 18.docx. View full document ...
Shareholders must approve any corporate decision that would cost more than $10,000. T/F. False Quizlet has study tools to help you learn anything. ... practice tests and expert-written solutions today. Flashcards. 1 / 10 Worksheet 18.4: Shareholders. Log in. Sign up. Get a hint. Shareholders must approve any corporate decision that would cost ...
Lesson 18.1 - Introduction to Shareholders Equity. 11:18 Lesson 18.2 - Accumulated Other Comprehensive Income - AOCI Lesson 18.2 - Accumulated Other Comprehensive Income - AOCI. 14:02 Lesson 18.3 - The Corporate Organization Lesson 18.3 - The Corporate Organization ...
Access Corporate Finance 4th Edition Chapter 18.4 solutions now. Our solutions are written by Chegg experts so you can be assured of the highest quality!
Access Fundamentals of Corporate Finance 7th Edition Chapter 18.4 solutions now. Our solutions are written by Chegg experts so you can be assured of the highest quality!
Study with Quizlet and memorize flashcards containing terms like 1. Shareholders must approve any corporate decision that would cost more than $10,000., 2. Because shareholders with a very small percentage of shares may not be able to travel to annual meetings, the law allows them to appoint someone else to vote their shares using a ___ authorization form. Management often ___ these., 3. For ...
One way that a company can distribute a dividend to shareholders without depleting its cash resources is to pay a share (stock) dividend. This dividend distributes additional shares of the company to the shareholders proportional to their current holdings. For example, if a company declares a 5% share dividend, a shareholder who currently holds ...
Worksheet 18.4: Shareholders. Log in. Sign up. Ready to play? Match all the terms with their definitions as fast as you can. Avoid wrong matches, they add extra time! Start game. Quizlet has study tools to help you learn anything. Improve your grades and reach your goals with flashcards, practice tests and expert-written solutions today.
Up Next in Section 18 - Shareholders' Equity. 09:57 Lesson 18.5 - Par Value Lesson 18.5 - Par Value. 11:19 Lesson 18.6 - Shares Issed for Noncas... Lesson 18.6 - Shares Issed for Noncas... 10:25 Lesson 18.7 - Basket Price of Securities Lesson 18.7 - Basket Price of Securities. Help Terms ...