Course Objective
Welcome to Part 5 of the 'Money Flow' Module!
This section will introduce using the firm's financial resources to ensure business stability - The impact of the dividend decision and the nature of the firm's policy.
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By the time you are finished with Part 5, you should understand that following:
- How the firm's dividend decision can impact its value—the tradeoff between cash dividends today versus growth in the future
- How the firm's dividend decision impacts its external financing requirement
- Dividend theories--Whether or not dividends and the dividend policy affects firm value
- The signaling and informational effects of dividend policies
- Various real-world dividend policies in practice
- Legal and institutional factors that can influence a distribution policy
- Non-cash dividend distributions—stock dividends, stock splits, and stock repurchases
- Dividend reinvestment plans (DRIPs)
