As a student of finance and management, it is essential to understand the trends of the stock market and its intricate workings. In order to do so, you need to have a thorough understanding of stocks, its value, dividends and the policy a company adopt for it. With dividend policy and share value homework help you can achieve that. But first, it is essential to understand the basics.
What is dividend policy?
A dividend policy is defined as the policy that is adopted by the company to fix upon a dividend which they would pay out to the shareholders. According to the dividend irrelevance theory, investors are not exactly concerned about the dividend policy as they presume that they can sell off their equity in exchange for cash. This means that the issue of dividends should have very little or no impact on the share prices. With dividend policy and share value assignment help, you will learn whether that it is true or not.
There are essentially four types of dividend policy that the companies abide by. They are:
- Regular dividend policy
- Stable dividend policy
- Irregular dividend
- no dividend
What is a share value?
You can understand what share value is thoroughly with dividend policy and share value homework help. Share value is the price of a single share of the company stock.
The price of the share is the determined through the Gordon growth model by summing up the future dividends expected out of a company. It is given by the equation
Present share value= (dividend per share)/ (discount rate –growth rate)
How does dividend policy effects share price?
As an investor and as a student of finance, it is necessary to understand the relationship between dividend policy and the share price. We, at helpmeinhomework.com can help you with just that with our dividend policy and share value assignment help.
There are two ways a company’s share price is affected when they issue a dividend to their shareholders:
- If the dividend payment is upper or lesser than what’s expected, then the market sentiment will shift accordingly, and the share price will rise or fall as a result of it.
- When there is a change in price as per expectations on the ex-dividend date once the company drops its market cap by the stated shareholder pay-out.
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