Question

Clientele effect, tax differential, agency cost and information asymmetries affect the dividend value perceived by investors". Express your views on this statement. Justify your answer citing appropriate examples from Suadi Firms.

Answer 1

Sol! genesal high 90owth StockS toaditionatty do not Pau dividends they orse mose itesy ncoease psice whese as dividends, they ae ayin stocK show Smalles Jain in coaprtal 9ains but ewosdS Lovestos wit Steble persiodic goowth. tar dibbesential and impact on oividend Tncome: The te ditberentiol view o6 dividend Poicy that sharse holdess Peebes eity appeecia the belief -tion to dividends eause capiteal gains ase ebbecf at owesodes thon dividents ushen vely 40yed the investment time hosi zon and othes fectoss a considesed Dividend Pay outs ase a Suse thngs ushile company gowth is unPredictable . Dividend ase evesy yeas shile cOPitel gad ns arse not tae texed unil stocks arse sold ouct oividend can actuouy incsease a Pay out Company s shore yo. lue this 1s Tegula low c6 n Ceme

o Dividend Palicy Agency cost- îmfact arse of ten employcd to mitigo Dividend Payment Agency Cost te is rmainly is fntesno cost ushic -Agencs cost aoises between management lact as Agent) ond shase holdess because if thers di b6erent ntesest view. The bonding expenditurse by the agentalong usith sesiduai loss. these always Some confaict of intesest etween Agent and poinciPal To due Ceurs se insides oonership gets m and mose the aoeny Cost kecame less as these ncs a se in connection between fnsideos and oo ness came as a tool t seducing Age. oividend Poyout Cy Cost Tofoomation asummetsies and impact on oivider oosesved that fisms thot ase moge Subjec we to infosmation asuooetoies aoe sess kesy to Pou initiate os incsease divdends and oisbursse Smaller amount