Dividends and Share Repurchases
Free CFA Level II lesson in Corporate Issuers. 12 min read, ~1,764 words.
MM irrelevance is the benchmark. Every competing theory identifies a specific friction that makes dividends matter. Signaling: dividend increases = management confidence. Cuts = pessimism. The signal is credible because unsustainable increases are costly. Lintner model: Expected dividend = Current div + Adjustment factor x (Target payout x Projected EPS...
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What this lesson covers
- Content
- Example 1
- Example 2
- Common Mistakes
- Key Takeaways
- Exam Shortcuts
Learning objectives
- dividends and repurchases
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