Dividend relevance

AFM – May 2018 – L3 – Q5a – Dividend policy in multinationals and transfer pricing

Discussing why share prices plunge when multinational companies suspend paying dividends and outlining theories of dividend policy.

Question

Recently, some multinational companies have suspended paying dividends. If, as some say, dividends are irrelevant, why have share prices plunged in most of these companies?

Required:
In your answer, outline both dividend policy theory and relevant examples.

Answer

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Tags: Dividend Policy, Dividend relevance, Share Price, Theories of Dividend
Level: Level 3

Topic: Dividend policy in multinationals and transfer pricing
Series: MAY 2018

FM – Nov 2020 – L2 – Q4c – Dividend Policy

Distinguish between dividend irrelevance theory and traditional dividend relevance theory, and explain dividend relevance theories.

Question

There are two major opposing views of dividend policy: the Modigliani and Miller’s dividend irrelevance theory and the traditional view of dividend policy.

Required:

i) Distinguish between the TWO (2) opposing views of dividend policy. (2 marks)
ii) Explain TWO (2) of the dividend relevance theories. (3 marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Dividend irrelevance, Dividend Policy, Dividend relevance, Modigliani and Miller
Level: Level 2

Topic: Dividend Policy
Series: NOV 2020

AFM – May 2018 – L3 – Q5a – Dividend policy in multinationals and transfer pricing

Discussing why share prices plunge when multinational companies suspend paying dividends and outlining theories of dividend policy.

Question

Recently, some multinational companies have suspended paying dividends. If, as some say, dividends are irrelevant, why have share prices plunged in most of these companies?

Required:
In your answer, outline both dividend policy theory and relevant examples.

Answer

Find Related Questions by Tags, levels, etc.

Tags: Dividend Policy, Dividend relevance, Share Price, Theories of Dividend
Level: Level 3

Topic: Dividend policy in multinationals and transfer pricing
Series: MAY 2018

FM – Nov 2020 – L2 – Q4c – Dividend Policy

Distinguish between dividend irrelevance theory and traditional dividend relevance theory, and explain dividend relevance theories.

Question

There are two major opposing views of dividend policy: the Modigliani and Miller’s dividend irrelevance theory and the traditional view of dividend policy.

Required:

i) Distinguish between the TWO (2) opposing views of dividend policy. (2 marks)
ii) Explain TWO (2) of the dividend relevance theories. (3 marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Dividend irrelevance, Dividend Policy, Dividend relevance, Modigliani and Miller
Level: Level 2

Topic: Dividend Policy
Series: NOV 2020

Question Tag: Dividend relevance

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AFM – May 2018 – L3 – Q5a – Dividend policy in multinationals and transfer pricing

Discussing why share prices plunge when multinational companies suspend paying dividends and outlining theories of dividend policy.

FM – Nov 2020 – L2 – Q4c – Dividend Policy

Distinguish between dividend irrelevance theory and traditional dividend relevance theory, and explain dividend relevance theories.

AFM – May 2018 – L3 – Q5a – Dividend policy in multinationals and transfer pricing

Discussing why share prices plunge when multinational companies suspend paying dividends and outlining theories of dividend policy.

FM – Nov 2020 – L2 – Q4c – Dividend Policy

Distinguish between dividend irrelevance theory and traditional dividend relevance theory, and explain dividend relevance theories.

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Question Tag: Dividend relevance

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AFM – May 2018 – L3 – Q5a – Dividend policy in multinationals and transfer pricing

Discussing why share prices plunge when multinational companies suspend paying dividends and outlining theories of dividend policy.

You're reporting an error for "AFM – May 2018 – L3 – Q5a – Dividend policy in multinationals and transfer pricing"

FM – Nov 2020 – L2 – Q4c – Dividend Policy

Distinguish between dividend irrelevance theory and traditional dividend relevance theory, and explain dividend relevance theories.

You're reporting an error for "FM – Nov 2020 – L2 – Q4c – Dividend Policy"

AFM – May 2018 – L3 – Q5a – Dividend policy in multinationals and transfer pricing

Discussing why share prices plunge when multinational companies suspend paying dividends and outlining theories of dividend policy.

You're reporting an error for "AFM – May 2018 – L3 – Q5a – Dividend policy in multinationals and transfer pricing"

FM – Nov 2020 – L2 – Q4c – Dividend Policy

Distinguish between dividend irrelevance theory and traditional dividend relevance theory, and explain dividend relevance theories.

You're reporting an error for "FM – Nov 2020 – L2 – Q4c – Dividend Policy"

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