The purpose of this chapter is to study the effect of dividend policy on the value of the firm:
• Why might it have an effect on firm value?
• MM dividend irrelevance proposition
• Taxation and dividends: capital gains versus ordinary income
• Empirical evidence?
Finance concepts discussed
• Retained earnings
• Capital gains versus ordinary income
We use a lot of Excel spreadsheets to put order in things, but truth to tell, this chapter uses hardly any sophisticated Excel concepts. The one function used is Sum.
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