Dividends and Share Repurchases(英文版)(ppt 31页)

Dividends and Share Repurchases(英文版)内容提要：
What is “dividend policy”?
It’s the decision to pay out earnings versus retaining and reinvesting them.  Includes these elements:
1.  High or low payout?
2.  Stable or irregular dividends?
3.  How frequent?
4.  Do we announce the policy?
Do investors prefer high or low payouts?  There are three theories:
Dividends are irrelevant:  Investors don’t care about payout.
Bird in the hand:  Investors prefer a high payout.
Tax preference:  Investors prefer a low payout, hence growth.
Dividend Irrelevance Theory
Investors are indifferent between dividends and retention-generated capital gains.  If they want cash, they can sell stock.  If they don’t want cash, they can use dividends to buy stock.
Modigliani-Miller support irrelevance.
Theory is based on unrealistic assumptions (no taxes or brokerage costs), hence may not be true.  Need empirical test.

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