dividend irrelevance theory


A postulation that the dividend policy of a company should have minimal effect on the investment decisions made by an investor due to the fact that the payment or non-payment of a dividend will not necessarily impact the net return to the investor. The assumption is that dividends not paid are reinvested by the company to generate more profit, thus higher stock values.
Browse Definitions by Letter: # A B C D E F G H I J K L M N O P Q R S T U V W X Y Z
dividend in arrears dividend limitation