股利政策外文文獻翻譯

1、Dividend Dividend policy policy作者：Eugene F. Brigham. Joel F.Houston刊物： 刊物：Fundamentals Fundamentals of of financial financial，2004， （8）:23-25.AbstractDividend policy p lays an important role in business decision-ma king

2、in the stock is the company's core financial issues. Thus the dividend distribution policy has been the company's stakeholders shares are closely watched. On the basis of the text of the introduction and dividend

3、 policy basic types of traditional and modern theories of dividend policy elaborate on, focusing on the status of the dividend distribution policy of listed companies, the dividend policy choice should consider factors w

4、ere analyzed, and deal with the problems raised corresponding constructive comments.Keywords: Dividend theory; dividend distribution; policy recommendations1. IntroductionProfitable companies regularly face three importa

5、nt questions: (1) How much of its free cash flow should it pass on to shareholders? (2) Should it provide this cash to shareholders by raising the dividend or by repurchasing stock? (3) Should it maintain a stable, consi

6、stent payment policy, or should it let the payments vary as conditions change?When deciding how much cash to distribute to shareholders, finance manager must keep in mind that the firm’s objective is to maximize sharehol

7、der value. Consequently, the target pay rate ratio—define as the percentage of net income to be paid out as cash dividends—should be based in large part on investors’ preference for dividends versus capital gains: do inv

8、estors prefer (1) to have the firm distribute income as cash dividends or (2) to have it either repurchase stock or else plow the earnings back into the business, both of which should result in capital gains? This prefer

9、ence can be considered in terms of the constant growth stock valuation model: gDS ? ? ? ?1^If the company increases the payout ration, the raises .This increase in the 1 Dnumerator, taken alone, would cause the stock pr

10、ice to rise. However, if is raised, then 1 Dless money will be available for reinvestment, that will cause the expected growth rate to decline, and that will tend to lower the stock’s price. Thus, any change in payout p

11、olicy will have two opposing effects. Therefore, the firm’s optimal dividend policy must strike a balance between current dividends and future growth so to maximize the stock price. In - 2 -same or similar firms, and, in

12、 any event, the riskiness of the firm’s cash flows to investors in the long run is determined by the riskiness of operating cash flows, not by dividend payout policy.TAX PREFERENCE THEORYThere are three tax-related reaso

13、ns for thinking that investors might prefer a low dividend payout to a high payout: (1) Recall from Chapter II that long-term capital gains are taxed at a rate of 20 percent, whereas dividend income is taxed at effective

14、 rates which go up to 39.6 percent. Therefore, wealthy investors might prefer to have companies retain and plow earnings back into the business. Earnings growth would presumably lead to stock prices increases, and thus l

15、ow- taxed capital gains would be substituted for higher-taxed dividends. (2)Taxes are not paid on the gains until a stock is sold. Due to time value effects, a dollar of taxes paid in the future has a lower effective cos

16、t than a dollar paid today. (3) If a stock is held by someone until he or she dies, no capital gains tax is due at all-the beneficiaries who receive the stock can use the stock’s value on the death day as their cost basi

17、s and thus completely escape the capital gains tax.Because of these tax advantages, investors may prefer to have companies retain most of their earnings. IF so, investors would be willing to pay more for low-payout compa

18、nies than for otherwise similar high- payout companies.There three theories offer contradictory advice to corporate managers, so which, if any, should we believe? The most logical way to proceed is to test the theories e

19、mpirically. Many such tests have been conducted, but their results have been unclear. There are two reasons for this(1)For a valid statistical test, things other than dividend policy must be held constant; that is, the s

20、ample companies must differ only in their dividend policies, and(2)we must be able to measure with a high degree of accuracy each firm’s cost of equity. Neither of these two conditions holds: We cannot find a set of publ

21、icly owned firms that differ only in their dividend policies, nor can we obtain precise estimates of the cost of equity.Therefore, no one can establish a clear relationship between dividend policy and the cost of equity.

22、 Investors in the aggregate cannot be seen to uniformly prefer either higher or lower dividends. Nevertheless, individual investors do have strong preferences. Some prefer high dividends, while others prefer all capital

23、gains. These differences among in dividends help explain why it is difficult to reach any definitive conclusions regarding the optimal dividend payout. Even so ,both evidence and logic suggest that investors prefer firms