Dividend Policy and Internal Financing
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| The amount of dividends relative to the company's net income or earnings per share. | Dividend Payout Rate
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| Dividend Irrelevance View
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| "High Dividends are Best" View
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| Low Dividends are Best" View
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| A company's dividend payment should equal the cash left after financing all the investments that have positive net present values. | Residual Dividend Theory
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| The belief that individuals and institutions that need current income will invest in companies that have high dividend payout.s | Clientele Effect
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| Information Effect
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| The difference in accessibility to information between managers and investors, which may result in a lower stock rock than would be true in conditions of certainty. | Information Asymmetry
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| Costs associated with potential conflict between managers and investors when these two groups are not the same. | Agency Costs
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| No matter what the decision area, how the market price responds to management's actions is not determined entirely by the action itself. | Expectations Theory
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| A dividend payment policy in which the percentage of earnings paid out in dividends is held constant. The dollar amount fluctuates from year to year as profits vary. | Constant Dividend Payout Ratio
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| A dividend policy that maintains a relatively stable dollar dividend per share over time. | Stable Dollar Dividend Policy
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| A corporate policy of paying a small regular dollar dividend plus a year-end extra dividend in prosperous years to avoid the connotation of a permanent divided. | Small, Regular Dividend Plus a Year-End Extra
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| Increasing Stream Policy
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| The date upon which a divided is formally declared by the board of directors. | Declaration Date
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| Date at which the stock transfer books are to be closed for determining the investor to receive the next dividend payment. | Date of Record
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| The date upon which stock brokerage companies have uniformly decided to terminate the right of ownership to the dividend, which is two days prior to the date of record. | Ex-Dividend Date
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| The date on which the company mails a dividend check to each investor of record. | Payment Date
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| A distribution of shares of up to 25 percent of the number of shares currently outstanding, issued on a pro rata basis to the current stockholders. | Stock Dividend
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| A stock dividend exceeding 25 percent of the number of shares currently outstanding. | Stock Split
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| The repurchase of common stock by the issuing firm for any other variety of reasons, resulting in reduction of shares outstanding. | Stock Repurchase
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| A formal offer by the company to buy a specified number of shares at a predetermined and stated price. The tender price is set above the current market price in order to attract sellers. | Tender Offer
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| Open Market Repurchase
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