股利政策外文及翻译.docx

股利政策外文及翻译.docx

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股利政策外文及翻译

目录

Dividendpolicy2

股利政策8

Dividendpolicy

Profitablecompaniesregularlyfacethreeimportantquestions:

（1）Howmuchofitsfreecashflowshoulditpassontoshareholders?

（2）Shoulditprovidethiscashtoshareholdersbyraisingthedividendorbyrepurchasingstock?

（3）Shoulditmaintainastable,consistentpaymentpolicy,orshoulditletthepaymentsvaryasconditionschange?

Whendecidinghowmuchcashtodistributetoshareholders,financemanagermustkeepinmindthatthefirm’sobjectiveistomaximizeshareholdervalue.Consequently,thetargetpayrateratio—defineasthepercentageofnetincometobepaidoutascashdividends—shouldbebasedinlargepartoninvestors’preferencefordividendsversuscapitalgains:

doinvestorsprefer

（1）tohavethefirmdistributeincomeascashdividendsor

（2）tohaveiteitherrepurchasestockorelseplowtheearningsbackintothebusiness,bothofwhichshouldresultincapitalgains?

Thispreferencecanbeconsideredintermsoftheconstantgrowthstockvaluationmodel:

Ifthecompanyincreasesthepayoutration,theraises

.Thisincreaseinthenumerator,takenalone,wouldcausethestockpricetorise.However,if

israised,thenlessmoneywillbeavailableforreinvestment,thatwillcausetheexpectedgrowthratetodecline,andthatwilltendtolowerthestock’sprice.Thus,anychangeinpayoutpolicywillhavetwoopposingeffects.Therefore,thefirm’soptimaldividendpolicymuststrikeabalancebetweencurrentdividendsandfuturegrowthsotomaximizethestockprice.Inthissection,weexaminethreetheoriesofinvestorpreference:

（1）thedividendirrelevancetheory,

（2）the"bird-in-the-hand"theory,and（3）thetaxpreferencetheory.

DIVIDENDIRRELEVANCETHEORY

Ithasbeenarguedthatdividendpolicyhasnoeffectoneitherthepriceofafirm’sstockoritscostofcapital.Ifdividendpolicyhasnosignificanteffects,thenitwouldbeirrelevance.TheprincipalproponentsofdividendirrelevancetheoryareMertonMillerandFrancoModigliani（MM）.Theyarguedthatthefirm’sisdeterminedonlybyitsbasicearningpoweranditsbusinessrisk.Inotherwords,MMarguedthatthevalueoffirmdependsonlyontheincomeproducedbyitsassets,notonhowthisincomeissplitbetweendividendsandretainedearnings.

TounderstandMM’sargumentthatdividendpolicyisirrelevance,recognizethatanyshareholdercanintheoryconstructhisorherowndividendpolicy.Ifinvestorscouldbuyandsellsharesandthuscreatetheirowndividendpolicywithoutincurringcosts,thenthefirm’sdividendpolicywouldtrulybeirrelevant.Note,though,thatinvestorswhowantadditionaldividendsmustincurbrokeragecosttosellshares,andinvestorswhodonotwantdividendsmustfirstpaytaxesontheunwanteddividendsandthenincurbrokeragecosttopurchaseshareswiththeafter-taxdividends.Sincetaxesandbrokeragecostscertainlyexist,dividendpolicymaywellberelevant.

Indevelopingtheirdividendtheory,MMmadeanumberofassumptionsespeciallytheabsenceoftaxesandbrokeragecosts.Obviously,taxandbrokeragecostsdoexist,sotheMMirrelevancetheorymaynotbetrue.However,MMarguedthatalleconomictheoriesarebasedonsimplifyingassumptions,andthatthevalidityofatheorymustbejudgedbyempiricaltest,notbytherealismofitsassumptions.

BIRD-IN-THE-HANDTHEORY

TheprincipalconclusionsofMM’sdividendirrelevancetheoryisthatdividendpolicydoesnotaffecttherequiredrateofreturnonequity,Ks.Thisconclusionhasbeenhotlydebatedintheacademiccircles.Inparticular,MyronGordonandJohnLintnerarguedthatKsdecreasesasthedividendpayoutisincreasebecauseinvestorarelesscertainofreceivingthecapitalgainswhicharesupposedtoresultfromretainingearningsthantheyareofreceivingdividendpayments

MMdisagreed.TheyarguedthatKsindependentofdividendpolicy,whichimpliesthatinvestorsareindifferentbetweenD1/P0andgand,hence,betweendividendsandcapitalgains.MMcalledtheGordon-Lintnerargumentthebird-in-the-handfallacybecause,inMM’sview,mostinvestorsplantoreinvesttheirdividendsinthestockofthesameorsimilarfirms,and,inanyevent,theriskinessofthefirm’scashflowstoinvestorsinthelongrunisdeterminedbytheriskinessofoperatingcashflows,notbydividendpayoutpolicy.

TAXPREFERENCETHEORY

Therearethreetax-relatedreasonsforthinkingthatinvestorsmightpreferalowdividendpayouttoahighpayout:

（1）RecallfromChapterIIthatlong-termcapitalgainsaretaxedatarateof20percent,whereasdividendincomeistaxedateffectiverateswhichgoupto39.6percent.Therefore,wealthyinvestorsmightprefertohavecompaniesretainandplowearningsbackintothebusiness.Earningsgrowthwouldpresumablyleadtostockpricesincreases,andthuslow-taxedcapitalgainswouldbesubstitutedforhigher-taxeddividends.

（2）Taxesarenotpaidonthegainsuntilastockissold.Duetotimevalueeffects,adollaroftaxespaidinthefuturehasalowereffectivecostthanadollarpaidtoday.（3）Ifastockisheldbysomeoneuntilheorshedies,nocapitalgainstaxisdueatall-thebeneficiarieswhoreceivethestockcanusethestock’svalueonthedeathdayastheircostbasisandthuscompletelyescapethecapitalgainstax.

Becauseofthesetaxadvantages,investorsmayprefertohavecompaniesretainmostoftheirearnings.IFso,investorswouldbewillingtopaymoreforlow-payoutcompaniesthanforotherwisesimilarhigh-payoutcompanies.

Therethreetheoriesoffercontradictoryadvicetocorporatemanagers,sowhich,ifany,shouldwebelieve?

Themostlogicalwaytoproceedistotestthetheoriesempirically.Manysuchtestshavebeenconducted,buttheirresultshavebeenunclear.Therearetworeasonsforthis

（1）Foravalidstatisticaltest,thingsotherthandividendpolicymustbeheldconstant;thatis,thesamplecompaniesmustdifferonlyintheirdividendpolicies,and

（2）wemustbeabletomeasurewithahighdegreeofaccuracyeachfirm’scostofequity.Neitherofthesetwoconditionsholds:

Wecannotfindasetofpubliclyownedfirmsthatdifferonlyintheirdividendpolicies,norcanweobtainpreciseestimatesofthecostofequity.

Therefore,noonecanestablishaclearrelationshipbetweendividendpolicyandthecostofequity.Investorsintheaggregatecannotbeseentouniformlyprefereitherhigherorlowerdividends.Nevertheless,individualinvestorsdohavestrongpreferences.Somepreferhighdividends,whileotherspreferallcapitalgains.Thesedifferencesamongindividendshelpexplainwhyitisdifficulttoreachanydefinitiveconclusionsregardingtheoptimaldividendpayout.Evenso,bothevidenceandlogicsuggestthatinvestorspreferfirmsthatfollowastable,predictabledividendpolicy.

Becausewediscusshowdividendpolicyissetinpractice,wemustexaminetwoothertheoreticalissuesthatcouldaffectourviewtowarddividendpolicy:

（1）theinformationcontent,orsignaling,hypothesisand

（2）Theclienteleeffects.MMarguedthatinvestors’reactionstochangeindividendpolicydonotnecessarilyshowthatinvestorspreferdividendstoretainedearnings.Rather,theyarguedthatpricechangefollowingdividendactionssimplyindicatethatthereisanimportantinformation,orsignaling,contentindividendannouncements.

Theclienteleeffectstotheextentthatstockholderscanswitch,afirmcanchangefromonedividendpayoutpolicytoanotherandthenletstockholderswhodonotlikethenewpolicyselltootherinvestorswhodo.However,frequentswitchingwouldbeinefficientbecauseof

（1）brokeragecosts,

（2）thelikelihoodthatstockholderswhoaresellingwillhavetopaycapitalgainstaxes,and（3）apossibleshortageofinvestorswholikethefirm’snewlyadopteddividendpolicy.Thus,managementshouldbehesitanttochangeitsdividendpolicy,becauseachangemightcausecurrentstockholderstoselltheirstock,forcingthestockpricedown.Suchapricedeclinemightbetemporary,butitmightalsobepermanentiffewnewinvestorsareattractedbythenewdividendpolicy,thenthestockpricewouldremaindepressed.Ofcourse,thenewpolicymightattractanevenlargerclientelethanthefirmhadbefore,inwhichcasethestockpricewouldrise.

Inmanyways,ourdiscussionofdividendpolicyparallelsourdiscussionofcapitalstructure:

wepresentedtherelevanttheoriesandissues,andwelistedsomeadditionalfactorsthatinfluencedividendpolicy,butwedidnotcomeupwithanyhard-and-fastguidelinesthatmanagercanfollow.Itshouldbeapparentfromourdiscussionthatdividendpolicydecisionsareexercisesininformedjudgment,notdecisionsthatcanbebasedonprecisemathematicalmodel.

Inpractice,dividendpolicyisnotanindependentdecision–thedividenddecisionsismadejointlywithcapitalstructureandcapitalbudgetingdecisions.Theunderlyingreasonforthisjointdecisionsprocessisasymmetricinformation,whichinfluencesmanagerialactionsintwoways:

1,Ingeneral,managersdonotwanttoissuenewcommonstock.First,newcommonstockinvolvesissuancecost---commissions,fees,andsoon-andthosecostscanbeavoidedbyusingretainedearningstofinancethefirm’sequityneeds.Also,asymmetricinformationcausesinvestorstoviewcommonstockissuesasnegativesignalsandthuslowersexpectationsregardingthefirm’sfutureprospects.Theendresultisthattheannouncementofanewstockissueusuallyleadstoadecreaseinthestockprices.Consideringthetotalcostsinvolved,includingbothissuanceandasymmetricinformationcosts,managersstronglyprefertouseretainedearningsastheirprimarysourceofnewequity.

2,Dividendch