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advantages of stock repurchase1 it may be seen as a true signal since repurchase may be motivated with management belief that firms shares are
stock repurchasethe company can buy back also several of its outstanding shares instead of paying cash dividends this is identified as stock
stock split and reverse splitthis is whereas a block of shares is broken down into smaller units or shares hence the number of ordinary shares rises
advantages of bonus mattera tax advantages shareholders can sell new shares and create cash in form of capital gains such
cash and bonus issue - dividendfor a firm to pay cash dividends it should contain adequate liquid fundsthough under conditions of liquidity and
agency theorythe agency problem between managers and shareholders can be resolved via paying high dividends if retention is low managers are
clientele effect theoryadvance via richardson petit in 1977it stated such different types of groups of shareholders or clientele have different type
tax differential theoryadvanced via lichtenberger and ramaswamy in 1979they argued that tax rate on dividends is higher quite than tax rate on
information signaling effect theoryadvanced via stephen ross in year 1977 he argued such in an inefficient market management can utilize dividend
bird-in-hand theoryadvanced via john leitner in year 1962 and furthered with myron gordon in year 1963 argues such shareholders are risk averse and
mm dividend irrelevance theorysuch was advanced via modigliani and miller in 1961 the theory asserts to a firms dividend policy has no effect on
advantages of residual theory1 saving on floatation costsno require to raise debt or equity capital as there is high retention of earnings that
constant dps plus extra or surplus1 beneath this policy a constant dps is paid every year nonetheless extra dividends are paid in years of
constant amount per share or fixed dps1 the dps is fixed in total amount of irrespective of the earnings level these generate certainty and are
constant payout ratio1 this is whereas the firm will pay a fixed dividend rate as like 40 percent of earnings the dps would consequently fluctuate as
importance and solution of dividend decisionsdividends decisions are integral part of a firms strategic financing decision it is hence a plan of
dividend policies and decisionsdividend policy determines the division of earnings among payments to stock holders ad re-investment in the firm
example of valuation of bonds and debenturesk is contemplating purchasing a 3 year bond worth 40000 carrying a nominal coupon rate of interest of 10
asset based valuation - examplek and k company limited is planning to absorb three other companies so as to realize its sales records of sh500 000
example of asset based valuationextracted information from the books of kent limited current liabilitiesbank overdraft sh300000
asset based valuation this method acquires into account the entire business along with reference to its assets and then divides the resultant
example of dividend basis valuationcompany laxmi synthetics pays a dividend of 10 on its sh60 par value ordinary shares this company uses a
dividend basis valuationownership of shares in entities - the owner to obtain a cash flow consisting of future dividends and the value of a share
earnings method or earning basis valuationby using the earning valuation method a company will employ its pe ratio to value its sharespe
bases of share valuationshare valuation can be done on the basis of income and asset values on the basis of income still a share will be entitled to