This paper circulates around the core theme of A written report entitled “Does a dividend policy matter?” together with its essential aspects. It has been reviewed and purchased by the majority of students thus, this paper is rated 4.8 out of 5 points by the students. In addition to this, the price of this paper commences from £ 99. To get this paper written from the scratch, order this assignment now. 100% confidential, 100% plagiarism-free.
Attached is an article, published September 2013, by Ming “Does a dividend policy matter?”. In it Ming points out that in perfect markets dividend policy should be irrelevant to a firm’s valuation but the existence of imperfections such as agency problems and information asymmetry could lead to dividend policy being relevant to a firm’s market value. Their study of 700 companies is consistent with this. Whist this was a Singapore based study Ming says:
“Prior studies conducted in more developed economies show evidence of similar positive associations between firms’ dividend policies and valuations. “
Required
A written report entitled “Does a dividend policy matter?”
This should be in the form of a report from the chief accountant of a company, listed on the London Stock Exchange, to the Board of Directors who have ask you to investigate whether or not choice of dividend policy could affect the market value of the company and report back to them. Your report should have a contents page and be structured in numbered sections but need not have an executive summary.
Review the proposition that with perfect market assumptions a company’s dividend policy is irrelevant to its market value. Go on to evaluate the evidence that the existence of market imperfections make dividend policy relevant to market value. Your report should consider agency and information asymmetry but not be limited to these. You might include the type of shareholders the company has and their perceptions of dividends now versus future growth, the influence of their financial requirements or tax position. Plus you may want to consider the nature of the company itself and its future investment plans and capital requirements (you may make assumptions here if you wish). This is not an exhaustive list of possible considerations. You should draw clear conclusions and recommendations (which may depend on any assumptions you have made). All key arguments must be evidenced and correctly referenced.
Guidance and criteria
This requires you to demonstrate knowledge and understanding of the arguments for and against the irrelevance of dividend policy. You are required to research the evidence in support of these arguments. Care must be taken to correctly cite and reference sources of evidence you refer to. Understanding can be demonstrated by your own personal commentary and evaluation.
In order to demonstrate understanding it is important for your work not to read as if compiled from unacknowledged extracts of published sources. The commentary must be your own and sources must be reference
