1. How is a company's distribution to shareholders policy defined?

1. How is a company's distribution to shareholders policy defined?

2. Has the number of publicly traded companies increased, over time? Please, explain.

3. What are some arguments in support of the dividend irrelevance theory?

Solutions

Expert Solution

Answer:1

The company's distributions to shareholders policy decided by the board of directors of the organization by taking into account the present financial position of the concern. It also considers all other related factors relating to the financial status of the organizations.

Answer:2

The no of publicly-traded company increased over time depending upon their turnover and other regulatory requirements set up by the respective stock exchanges form time to time. It also needed the permission of the respective board to register their name in the stock exchanges, the process is called listing.

Answer:3

Dividend irrelevance policy is coined by Modigliani and Miller, which argues that dividend is irrelevant to the financial status of the corporation. Which sets several assumptions are as follows:

1. There are no taxes

2. There is a perfect capital market

3. Investors behave rationally

4. There is perfect information in the market.

jeff jeffy answered 2 years ago

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