The paper examines corporate dividend policy reviewing various theories including MM propositions on the impact of dividend policy on the share price. A real life example from stock market is analysed to compare practice with theory. Conclusions are made about the potential of the dividend policy to provide insight for management's views on earnings, trends and current share prices.
The dissertation investigates the role of dividend signaling in corporate finance arguing that special dividends used to be commonly paid by NYSE firms but have become rare nowadays. Literature is reviewed on the special dividends history, the impacts of special dividends announcements, the models for analyzing price variations and instability in the market conditions, etc. The activities of special dividends on the MSCI World index are explored for the period from July 1997 to June 2007. Raw data is presented in the appendices. Conclusions are made about the impact of the special dividends on the performance of the company.
The paper is based on case study "Bessemer Steel Products, Inc., Dividend Policy" and reports on the diversification strategy of the light trucks' manufacturer Bessemer Steel Products (BSP) highlighting advantages and disadvantages of their policies, and discussing theoretical underpinnings of a firm's dividend policy with reference to BDP.
The paper examines the dividend policy of LogicaCMG and BP over the period from 1999 to 2003 comparing their ratios, reviewing the theories of Dividend Policy (DP), the Agency theory, etc. and discussing their applications to the companies' practices.
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