Shareholder’s Equity
Summary of articles
Relationship between Dividend policy and shareholder’s wealth
In this article, the author examines the relationship between dividend policy adopted in a company and the shareholder’s wealth. The objective of the firm usually is for the shareholder’s wealth to be maximized. Whatever dividend policy adopted by the firm, the decision objective ought to be maximization of shareholder’s wealth. The author begins by recognizing Modigliani and Miller’s preposition on dividend irrelevancy theory. The theory asserts that the dividends do not have any bearing on the value of the firm. According to the ...