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A Pedagogic Note on Dividend Policy
Published online by Cambridge University Press: 19 October 2009
Extract
For some time there has been disagreement among financial economists as to the effect of dividend policy on the valuation of a firm under conditions of uncertainty. On one side of the debate Miller and Modigliani (MM) [11] argue that the capitalization rate on shares is independent of the dividend policy of the firm. Gordon [6], [7], [8], and others, on the other hand, reject this proposition and present theories of valuation where share prices and capitalization rates are very much dependent upon the dividend policies of firms.
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- Communications
- Information
- Journal of Financial and Quantitative Analysis , Volume 6 , Issue 4 , September 1971 , pp. 1147 - 1154
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- Copyright © School of Business Administration, University of Washington 1971
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