1、 中文 3943 字 2135 单词 Fundamentals of financial， 2004，（ 8） :23-25. Dividend policy Eugene F. Brigham. Joel F.Houston Abstract Dividend policy plays an important role in business decision-making in the stock is the companys core financial issues. Thus the dividend distribution policy has been the compan
2、ys stakeholders shares are closely watched. On the basis of the text of the introduction and dividend policy basic types of traditional and modern theories of dividend policy elaborate on, focusing on the status of the dividend distribution policy of listed companies, the dividend policy choice shou
3、ld consider factors were analyzed, and deal with the problems raised corresponding constructive comments. Keywords: Dividend theory； dividend distribution； policy recommendations 1. Introduction Profitable companies regularly face three important questions: (1) How much of its free cash flow should
4、it pass on to shareholders? (2) Should it provide this cash to shareholders by raising the dividend or by repurchasing stock? (3) Should it maintain a stable, consistent payment policy, or should it let the payments vary as conditions change? When deciding how much cash to distribute to shareholders
5、, finance manager must keep in mind that the firms objective is to maximize shareholder value. Consequently, the target pay rate ratiodefine as the percentage of net income to be paid out as cash dividendsshould be based in large part on investors preference for dividends versus capital gains: do in
6、vestors prefer (1) to have the firm distribute income as cash dividends or (2) to have it either repurchase stock or else plow the earnings back into the business, both of which should result in capital gains? This preference can be considered in terms of the constant growth stock valuation model:gD
7、S 1 If the company increases the payout ration, the raises 1D .This increase in the numerator, taken alone, would cause the stock price to rise. However, if 1D is raised, then less money will be available for reinvestment, that will cause the expected growth rate to decline, and that will tend to lo
8、wer the stocks price. Thus, any change in payout policy - 1 - will have two opposing effects. Therefore, the firms optimal dividend policy must strike a balance between current dividends and future growth so to maximize the stock price. In this section, we examine three theories of investor preferen
9、ce: (1)the dividend irrelevance theory, (2)the bird-in-the-hand theory ,and(3) the tax preference theory. 2.dividend theory DIVIDEND IRRELEVANCE THEORY It has been argued that dividend policy has no effect on either the price of a firms stock or its cost of capital. If dividend policy has no signifi
10、cant effects, then it would be irrelevance .The principal proponents of dividend irrelevance theory are Merton Miller and Franco Modigliani(MM).They argued that the firms is determined only by its basic earning power and its business risk. In other words, MM argued that the value of firm depends onl
11、y on the income produced by its assets, not on how this income is split between dividends and retained earnings. To understand MMs argument that dividend policy is irrelevance, recognize that any shareholder can in theory construct his or her own dividend policy .If investors could buy and sell shar
12、es and thus create their own dividend policy without incurring costs, then the firms dividend policy would truly be irrelevant. Note, though, that investors who want additional dividends must incur brokerage cost to sell shares, and investors who do not want dividends must first pay taxes on the unw
13、anted dividends and then incur brokerage cost to purchase shares with the after-tax dividends. Since taxes and brokerage costs certainly exist, dividend policy may well be relevant. In developing their dividend theory, MM made a number of assumptions especially the absence of taxes and brokerage cos
14、ts. Obviously, tax and brokerage costs do exist, so the MM irrelevance theory may not be true. However, MM argued that all economic theories are based on simplifying assumptions, and that the validity of a theory must be judged by empirical test, not by the realism of its assumptions. BIRD-IN-THE-HA
15、ND THEORY The principal conclusions of MMs dividend irrelevance theory is that dividend policy does not affect the required rate of return on equity, Ks. This conclusion has been hotly debated in the academic circles .In particular, Myron Gordon and John Lintner argued that Ks decreases as the divid
16、end payout is increase because investor are less certain of receiving the capital gains which are supposed to result from retaining earnings than they are of receiving dividend payments MM disagreed .They argued that Ks independent of dividend policy, which implies that investors are indifferent bet
17、ween D1/P0 and g and, hence, between dividends and - 2 - capital gains. MM called the Gordon-Lintner argument the bird-in-the-hand fallacy because, in MMs view, most investors plan to reinvest their dividends in the stock of the same or similar firms, and, in any event, the riskiness of the firms ca
18、sh flows to investors in the long run is determined by the riskiness of operating cash flows, not by dividend payout policy. TAX PREFERENCE THEORY There are three tax-related reasons for thinking that investors might prefer a low dividend payout to a high payout: (1) Recall from Chapter II that long
19、-term capital gains are taxed at a rate of 20 percent, whereas dividend income is taxed at effective rates which go up to 39.6 percent. Therefore, wealthy investors might prefer to have companies retain and plow earnings back into the business. Earnings growth would presumably lead to stock prices i
20、ncreases, and thus low- taxed capital gains would be substituted for higher-taxed dividends. (2)Taxes are not paid on the gains until a stock is sold. Due to time value effects, a dollar of taxes paid in the future has a lower effective cost than a dollar paid today. (3) If a stock is held by someon
21、e until he or she dies, no capital gains tax is due at all-the beneficiaries who receive the stock can use the stocks value on the death day as their cost basis and thus completely escape the capital gains tax. Because of these tax advantages, investors may prefer to have companies retain most of th
22、eir earnings. IF so, investors would be willing to pay more for low-payout companies than for otherwise similar high- payout companies. There three theories offer contradictory advice to corporate managers, so which, if any, should we believe? The most logical way to proceed is to test the theories
23、empirically. Many such tests have been conducted, but their results have been unclear. There are two reasons for this(1)For a valid statistical test, things other than dividend policy must be held constant； that is, the sample companies must differ only in their dividend policies, and(2)we must be a
24、ble to measure with a high degree of accuracy each firms cost of equity. Neither of these two conditions holds: We cannot find a set of publicly owned firms that differ only in their dividend policies, nor can we obtain precise estimates of the cost of equity. Therefore, no one can establish a clear
25、 relationship between dividend policy and the cost of equity. Investors in the aggregate cannot be seen to uniformly prefer either higher or lower dividends. Nevertheless, individual investors do have strong preferences. Some prefer high dividends, while others prefer all capital gains. These differences among in dividends help explain why it is difficult to reach any definitive conclusions regarding the optimal dividend payout. Even so ,both evidence and logic suggest that investors prefer
