Chow, Alvin (2015) examined the Bird In Hand (BIH) and Dividend Irrelevance (DI) theories. In one hand, Bird In Hand (BIH) theory implies that having a cash payout appears to be better than the company retaining the earnings for growing the business. On the other hand, Dividend Irrelevance (DI) states that a company dividend policy has no impact on shareholder wealth. As per both debates in class and breakout session on dividends and the information provided in this article.

 Answer the following questions:

Required:

1. Does dividend policy matter considering cash and stock repurchase dividends? (
2. Discuss at least two reasons of reverse stock splits.
3. If you conclude that there is behavioral inclination in stock markets. Which theory you will follow to make an investment decision and why?

Answer rating: 100% (QA)

Regarding the first question whether dividend policy matters considering cash and stock repurchase dividends the answer depends on various factors and perspectives Here are some key points to consider ... View the full answer