Evaluation between Dividend Policies and Firm Value


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Authors

  • Pınar Avcı Department of Media and Communications, Marmara Ereğlisi Vocational School, Tekirdag Namik Kemal University, Turkey
  • Sevgi Sümerli Sarıgül Department of Marketing and International Trade, Social Sciences Vocational School, Kayseri University, Turkey

Keywords:

Dividend, Dividend Policies, Firm Value, Bird in Hand, Market Value

Abstract

For public companies whose shares are traded on the stock exchange, dividend distribution (dividend) policy is important. Therefore, the aim of this study is to explain the effect of dividend policies on the value of the firm by talking about dividends and dividend payment policies. When the studies in the literature are examined, it is determined that the value of companies varies depending on the dividend decisions. At the same time, valuation theories related to dividend distribution policy are being developed. The first of these is the dividend irrelevance theory, which argues that dividend distribution does not affect market value. The second is the bird in hand theory, and according to this theory, the bird profit in the hand refers to the bird capital gain on the branch. In this theory, he argues that the firm's dividend distribution policy affects market value. The last theory is the tax difference theory. According to this theory, the issue of whether the dividend policy affects the market value of the firm in terms of the taxation rate should be evaluated. Thus, it is seen that dividend policies are important in terms of the value of the companies and these findings provide valuable advice to the company managers.

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Published

2023-02-08

How to Cite

Avcı, P., & Sümerli Sarıgül, S. (2023). Evaluation between Dividend Policies and Firm Value. International Conference on Frontiers in Academic Research, 1, 412–417. Retrieved from https://as-proceeding.com/index.php/icfar/article/view/140