Dividend Policy

Assumption:

1.    No change in investment opportunities and returns on business investment.

2.    No change on company capital structure.

-       No change on debt to equity ratio.

-       No change in gearing ratio.

Modigliani-Miller’s dividend irrelevancy proposition

-       The value of company will not affect by capital structure of company.

-       The dividend policy of company will not affect the share value, market value and shareholders’ wealth.

-       The company should not give up positive Net Present Value project to increase dividend.

Modigliani-Miller’s dividend irrelevancy proposition – the conditions

1.    Ignore taxes. (company and personal taxes)

2.    Ignore transaction cost.

-       When investors buy or sell no need pay any fee.

-       No cost of issue new share.

3.    Lending and borrowing’s interest rate is same.

4.    All parties (company and investors) of market have full information.

5.    Investors are indifferent between dividends and capital gains.

Dividend – irrelevance position

-       Under the value of dividend unchanged situation, it will not cause shareholders unsatisfied although the company changes the timing to pay dividend to shareholders. (don’t pay dividend to shareholders)

-       That is because the shareholders can get the value from capital gain, although do no have dividend.

-       Therefore the dividend policy will not affect the shareholders’ wealth.

-       Under dividend – irrelevance position, dividend policy will not important.

Dividends as a Residual

-       Company only will pay dividend after cover the future investment (required rate of return of the project) and have extra fund.

-       Company’s value increase only when the company invest in positive Net Present Value project.

-       The shareholders should receive the cash because they can use it to invest in other firms.

Dividend – relevance position

Under this real world the dividend policy of a company can affect the company.

The Clientele Effect

-       Investors will attract by company which can fulfill their requirement.

-       Different dividend policy of company can attract different kind of investors.

-       Therefore each company will build up a dividend policy which can satisfy and retain their shareholders.

-       In order to satisfy and retain the type of shareholder that the company target, each company will promote different dividend policy. Such as:

Ø  Promote high dividend payment, or

Ø  Promote low payout dividend payment, or

Ø  Promote stable dividend payment, or

Ø  Promote fluctuating dividend payment. (dividend payment depend by company earning, high earning pay high dividend, low earning pay low dividend)

Taxes

-       Personal taxes.

-       Taxation can affect investors whether prefer get capital gain or get dividend.

-       Individual shareholder can sell share by high price with no tax deducted, if they receive dividend pay by company they need to pay tax to government.

-       High tax rate will lead shareholders prefer low dividend payment.

-       Low tax rate will lead shareholders prefer high dividend payment.

Dividends as conveyors of information

-       No full information between shareholders and management term.

-       Shareholders are the owner but not manager of a company, shareholder only can get company information from annual report or decision making dividend of the company.

-       Therefore, if the company increase the dividend payment will give the shareholders a good signal about the company have favorable prospects.

-       Dividends as conveyors of information will cause company:

Ø  Promote high dividend payment.

ü  Some shareholder will consider that high dividend payment may be will lead to company do no have enough cash to do future investment or invest positive Net Present Value project, it will affect the future firm’s value.

Ø  Promote low dividend payment.

ü  Some shareholder will consider that low dividend payment can let the company have enough cash to do future investment or invest positive Net Present Value project, it will increase the future firm’s value.

Ø  Promote stable dividend payment.

ü  Only strong financial background company able to remain stable dividend payment no matter the company gain or less.

Resolution of Uncertainty – Bird-in-the-hand

-       Shareholders prefer receive high dividend today than receive in future because future is uncertainty.

-       Bird-in-the-hand will encourage the company:

Ø  Promote high dividend payment.

ü  Shareholders receive high dividend today to do other invest to increase their shareholders’ wealth, because future is uncertainty.

Ø  Promote fluctuating dividend payment.

ü  Current dividend is better than uncertainty in future, because the shareholders don’t know the company will get earning in future or not.

-       The correct way to solve the uncertainty are:

(i)            Do no receive high dividend payment today because it will lead to company do no have enough cash to do future investment or invest positive Net Present Value project, it will affect the future firm’s value.

(ii)          Increase cost of capital or use high cost of capital.

Owner control (agency theory)

-       Many companies will decide to pay high dividend and issuing new shares to raise cash for investment.

-       Because no full information between shareholders and management term, therefore shareholders worry management term will invest in negative Net Present Value project or project which is only benefit management term.

-       Therefore, shareholders will require high dividend, management term need fund for investment they need to ask shareholders. The shareholders can get the currently information of company.

-       Disadvantage of owner control:

Ø  Company need to pay transaction cost when issue new share, it will reduce firm’s value.

Ø  Shareholders need to pay tax when receive dividend, it will reduce shareholders’ wealth.

-       Owner control will cause company

Ø  Promote high dividend payment.

ü  High dividend payment wills easy shareholders to monitor the management term, because the manager need to provide more information to shareholders when decide to invest new project.

Ø  Promote fluctuating dividend payment.

ü  Shareholders can get the signal directly base on the dividend payment. If company gain they will receive high dividend. If company loss they will receive low dividend or don’t have dividend.

Scrip Dividends (Share Dividend)

-       Company paying share dividend to shareholders not normal cash dividend.

-       Advantage of scrip dividends

Ø  That cash does not leave the company.

Ø  Shareholders can save tax and transaction cost by holding share.

Share Repurchase and Special Dividends

-       Share repurchase means company buys back share by its own stock, it can increase EPS, and the share price of company.

-       Special dividend is similar to a normal dividend but is usually bigger and paid on a one-off basis.

The two key questions

1.     Can shareholder wealth be increased by changing the pattern of dividends over a period of years?

Ans: Yes, but that is not straightforward formula for us to calculate the best pattern. Because there are many different and unpredictable factors will affect it, such as clientele preference, tax system and other.

2.     Is a steady, stable dividend growth rate better than one which varies from year to year depending on the firm’s internal need for funds?

Ans: Perform well or bad in no under control. Dividend payment remains stable or fluctuation which one is better and what reason affect it will show in following:

The dividend decision – the four forces

Forces promoting a high dividend payment

(i)    Some clienteles

-       Shareholders preference, different shareholders have different preference.

(ii)  Owner control (agency theory)

-       Shareholders require high dividend can let them easy to monitor management team, because manager needs to ask shareholders when need fund for investment. The shareholders can get the currently information of company.

(iii) Uncertainty (bird-in-the-hand)

-       Shareholders receive high dividend today to do other invest to increase their shareholders’ wealth, because future is uncertainty.

(iv) Signalling (Dividends as conveyors of information)

-       The company increase the dividend payment will give the shareholders a good signal about the company have favorable prospects.

Forces promoting a low payout dividend payment

(i)    Tax system

-       Different country will have different tax system. High tax rate will lead shareholders prefer low dividend payment

(ii)  Some clienteles

-       Shareholders preference, different shareholders have different preference.

(iii) High growth potential

-       The company has high growth potential therefore need more fund for future investment.

(iv) Unstable earning

-       Because of earning in future is uncertainty in order to measure company can save fund when company gain and have enough fund when company loss, company remain low dividend payment may be better.

(v)  Avoid future dividend cuts

-       If earning increase the dividend payment also will increase, if earning decrease the dividend payment also will decrease, because of future is uncertainty. In order to measure company can save fund when company gain and have enough fund when company loss, company remain low dividend payment may be better.

(vi) Lender agreement restrictions

-       Company need to pay interest to debt holders first therefore no enough funds to pay high dividend to shareholders.

(vii)  Low liquidity

-       Company has no enough cash flow.

Forces promoting a stable dividend payment

(i)    Some clienteles

-       Shareholders preference, different shareholders have different preference.

(ii)  Signalling

-       Dividend policy change is difficult to justify whether it is good or bad signal. If investors interpret this signal is positive they will continue invest, if no they may be will quit. In order to avoid this kind of confusing remain stable may be better.

(iii) Avoid future dividend cuts

-       If earning increase the dividend payment also will increase, if earning decrease the dividend payment also will decrease. In order to avoid dividend decrease, company will remain stable may be better.

(iv) Stability raises credit standing

-       Only strong financial background company able to remain stable dividend payment no matter the company gain or less.

  

Forces promoting a fluctuating dividend payment

(i)    Some clienteles

-       Shareholders preference, different shareholders have different preference.

(ii)  Owner control (agency theory)

-       Shareholders will require high dividend, management term need fund for investment they need to ask shareholders. The shareholders can get the currently information of company. It can avoid manager invest in project which only benefit management term.

(iii) Uncertainty (bird-in-the-hand)

-       Current dividend is better than future uncertainty dividend.

(iv) Signalling

-       Shareholders can get the signal directly base on the dividend payment. If company gain they will receive high dividend. If company loss they will receive low dividend or don’t have dividend.

Practical constraints to dividend payment

• Legal constraints

-       Different country have different tax rate (personal tax in dividend income), therefore every company have different dividend policy.

• Liquidity

-       The earnings and cash flow of company is no 100% match, because of accounting profit problem. Therefore dividend payment can not 100% depend on the accounting profit earning.

• Interest payment obligations

-       Company need to pay interest to debt holders first before pay dividend to shareholders.

• Investment opportunities

-       Low investment opportunity company normally can pay high dividend currently.

A suggested action plan for a dividend policy

(How to decide whether pay high or low dividend)

1. Do forecast in “surplus” cash flow, the dividend will only pay without give up positive Net Present Value project.
2. Base on the forecast of the company, most of the company will still choice a stable dividend payment because future is uncertainty. Therefore, the company needs to retain some cash in hand for uncertainty future.
3. Forecast is no 100% correctly, maintain stable dividend payment if company earning is more than company forecast can pay share dividend.

 Conclusion

The firm’s value and shareholders’ wealth will decrease when reject positive Net Present Value project to pay dividend.

Issuing new share will not benefit company because transaction cost will increase cost of capital of company and decrease firm’s value.

Pay dividend will not benefit shareholder because personal tax in dividend pay will reduce shareholders’ wealth.

Share dividend and can avoid paying cash dividend and retain cash in company.

Share repurchase can increase EPS, and the share price of company.

Company will pay dividend only when the company is low opportunity investment.

Most of company will maintain stable dividend payment. There do not prefer formula to calculate the optimal dividend-to-earning ratio. 

霎那光辉

有人说过，
霎那间的光辉不代表永恒。

但是，
对烟花而言，
那霎那间的光辉；
那霎那间的炫灿；
就是它们的一生、
它们的永恒。

找一个

找一个，
可以爱你一辈子的人；
可以疼你一辈子的人；
可以宠你一辈子的人；
可以包容你一辈子的人；
可以迁就你一辈子的人。

找一个，
可以爱你、疼你、宠你、包容你、迁就你一辈子，
而你也深爱着他的人，
一起过一辈子吧！

找一个人

找一个人，
当你开心时，你可以在他的面前欢笑；
当你难过时，你可以在他的面前大哭；
当你委屈时，你可以向他倾诉；
当你生气时，你可以不用对他掩饰。

找一个人，
在你卸妆后，他依然可以真心的称赞你漂亮；
在你换下美丽的衣裳过后，他依然可以真心的说你有魅力；
在你年华老去的时候，依然深爱着你。

找一个人，
一个可以接受真实的你的人，
一起过日子。

《来不及说我爱你》

 

【作者】：匪我思存

【简介】：

已订婚的她，在无意间救下了一个英俊又权倾一方的贵公子，原本以为这只是一场擦肩而过的邂逅，谁知道他居然甘冒奇险，在婚礼上把她抢了过来，而等待他们的却不是王子与灰姑娘走入城堡的童话……人这一生能有多少个时刻会爱上一个人，而爱情中最大的悲剧就在于当那句“我爱你”还没来得及说出口的时候，你爱的那个人已消失在人海中。

【忘川感想】：
前言：
去年，因为喜欢钟汉良演的康熙（他真的很适合演康熙，把康熙演的好好），所以开始看看他资料，意外的发现了这《来不及说我爱你》。由于距离电视剧上映还有好长的一段时间，见其他网上的人对这个故事的原著赞不绝口，心痒难耐之下在学校假期时，终于找到了这小说来看（由于马来西亚应该是蛮难买到这本小说的，所以我看得这小说其实是从网络上下载的）。


看了匪我思存这小说之后，心情可说是受到了很大的震撼。另一半竟然很庆幸电视剧对后半部到结局都有所改编，因为我个人认为这原著小说的结局有点对小孩不宜的震撼，所以还是稍微改编的好。


由于我看的是小说版本的《来不及说我爱你》，所以我这里谈的是我读了这部小说后的心情以及感想。这部小说其实早已在好几个月前看完了，也早就想把心中的震撼以及感想写下，但是一直写不出来，为此我还在看了第二遍（我很少会在还记得内容的情况下再看第二遍的），但是却是千头万绪，心情杂乱，经常这几个月的沉淀，终于写得出来了。。。


另外，期待电视剧版本ing， 以及感谢脉脉斜阳精美的制图。


感想：
伤害已造成，破镜无法重圆。。。


他要给的天下，不是她所需所求的。然而她所需的唯一，他给不到；她所求的成全和放手，他更是办不到。。。

在我看来，一开始尹静婉是爱她的未婚夫--许建彰的，即使后来日日面对慕容沣的殷勤，她心中所爱的依然是许建彰。然而，当许建彰因受到慕容沣的威胁而弃她离去之后，他们之间的爱出现了瑕疵，出现了裂痕。进而尹静婉没办法在如以往般爱许建彰了。取而代之的是对慕容沣的爱情。


尹静婉其实是完全可以理解许建彰当初的弃她远去，因为她明白要许建彰为了她而赔上自己全家的身家性命是不可能的，所以她原谅了他，继续他们之前的婚约。但是经过那次的背叛、离弃以及伤害。尹静婉已经无法再爱这个男人了，至少已经无法像以前那样。。。那之后，她心里有了另外一个人，那就是慕容沣。当她知道许建彰是被慕容沣吓跑之后，并没肯接受慕容沣，是因为她知道慕容沣其实也是一样的，就如许建彰一样无法为她放弃自己的身家性命。所以她说了非常痛心的一句“己所不能，勿责于人”，之后便随父回乡。


她回乡后，慕容沣再度出现要带她走，她没答应，是因为她心里清楚自己输不起。那里是她的根本理由，如果她和慕容沣一走了之，就等于抛弃她所有的根本。从此以后，她一无所有，她仅能拥有依靠的就只有慕容沣了，那是多么的无助，多么的冒险，她不敢，她害怕，所以她拒绝。

然而，她却戏剧性的从婚礼中逃走，冒着枪林弹雨直奔到慕容沣怀里，因为她感动于慕容沣竟然会为了劝她不要嫁给别人，而弃身家性命不顾,在和敌方苦战之时竟深入敌地；她感动的是慕容沣竟愿意为了她而输掉那场战争。因此她之前的所有不安、害怕在那一霎间全部都消失了——一个可以为了她连自己的宏图大业、身家性命都可以不顾的男人，日后是绝对不会背叛她的。她唯一害怕的是永远失去了慕容沣，所以她顾不得忠孝仁爱，不顾一切的，抛弃所有地奔向了慕容沣。但是，其实慕容沣那次只是耍了置之死地而后生的兵法战略。

我所得到的讯息就是，战局的走势早已在慕容沣的掌控之中，深入敌地除了是出之对尹静婉的爱之外，其实也包含了他对这场战争的十拿九稳，他那时并为陷入真正的困局。但是尹静婉不知道，她以为他可以为她倾其所有。他也不知道那些对尹静婉的意义，以及这些所代表的承诺，他也曾经一度以为他可以，可以一生不负尹静婉，但事实却是不行，时势却是不许。为了他的身家性命以及宏图大业，他最终注定要辜负，他最终决定另娶他人，谁也无法阻止他，即使是尹静婉跟她腹中的骨血也不行。

在我眼里，尹静婉是个一爱就可以很勇敢地彻底的去爱的女人。为了许建彰，她可以孤身犯险的去求慕容沣；为了许建彰，她可以置女人最重要的名节于度外跟慕容沣合作。之后，为了慕容沣，她可以毁掉她跟许建彰从小的情义，逃婚出走；为了慕容沣，她可以义无反顾的离开她的父母，让她的父母伤心、难过甚至颜面无存；为了慕容沣，她抛弃她原有的一切，变成除了他便一无所有的女人。

她可以为了自己所爱的倾其所有、义无反顾。她所求的却只有一个，就是唯一的爱，就是无论发生任何事情都不会背叛对方的爱情。许建彰做不到，慕容沣也做不到。她可以理解他们的苦衷，她可以原谅他们给的伤害，但是她理解以及原谅不代表她可以接受。就如她可以理解以及原谅许建彰，却无法再如以前般爱他一样。同样的，尹静婉也无法再留在慕容沣身边了，即使慕容沣哀求她，甚至是禁锢她，她还是得逃。即使她知道其中困难重重，甚至性命会受到威胁，她还是不顾一切的选择逃跑。当爱情已经伤了、破了、碎了、裂了，谁也无法留住她。

慕容沣虽然还是把尹静婉捉了回来，但是他却永远的失去了他们的骨肉，永远失去了能够绑住她的韧带了。尹静婉在得到慕容沣的“发妻” -- 程谨之的帮助下，离开了慕容沣的身边。

若干年后，慕容沣已经是总司令了，势力早已远远的超越程家，也就是说他其实已经可以不再顾虑与程家的婚姻了。这时，慕容沣再次见到尹静婉，但尹静婉已成了程谦之的哥哥 -- 程信之的妻子，还生了个与她很相像的女儿兜兜。小说里的程信之是个非常有包容量的男人，他不仅包容了尹静婉与慕容沣的过去，他还真正的爱上尹静婉，为了娶她，他可以无视慕容沣的势力，以及尹静婉将会给程谨之以及程家所带来的窘境。他让她从惊涛波浪中，回归平和。他让她破碎的心重新愈合——他重新给了她幸福。

但慕容沣，他恼，他恨！他再次求尹静婉，求她离开程信之，希望他们能回到从前。但是尹静婉已经无法再爱他，她现在爱的是她的丈夫程信之和女儿兜兜。慕容沣根本无法理解程信之和兜兜对尹静婉的重要性，他只知道他真的是恨极、恼极，因此他制造了车祸害死了程信之还有兜兜。悲痛欲绝的尹静婉带着兜兜的尸体在慕容沣面前，用慕容沣以前送给她的宝石手枪自尽，断气前说了句让可以慕容沣万劫不复的话，那就是：“兜兜今年七岁，她是你。。。”，慕容沣终于彻底的崩溃了，从前所执着的一切，什么宏图大业，身家性命，一下子就变得一文不值，毫无意义，烟消云散。纵使程谨之一再证明，兜兜的的确确是程信之的亲生骨肉，尹静婉只是为了报复他才说那些话也好，慕容沣已经什么也听不进去了。尹静婉死了，他所有所有的一切都毫无意义了。

看到这个结局，我第一个感觉是无底的震撼。在前面慕容沣是多么的风度翩翩，但是到了后来却变成了无可救药的丧心病狂。从他开始禁锢尹静婉时我就开始毛骨悚然了，虽然可以解释为那是因为他太爱她、太害怕失去她，但毛骨竦然的感觉丝毫不减，因为他根本没顾及尹静婉的痛苦，他只看到了他自己要什么，要怎么样。但是他没想要顾及到另一个血淋淋、活生生的她想要什么，想要怎样。他似乎忘了是他自己辜负尹静婉在先，他根本就已经毫无资格了。他似乎理所当然的认为尹静婉应该要理解他的苦衷，接受他的选择还有安排。他忘了，尹静婉也是个人，她也可以有自己的选择，她也可以有自己的安排，她也有权利去追求她自己想要的幸福。他忘了，尹静婉为了他，她早已义无反顾的倾其所有，对他，她无愧。然而他却负了她的承诺，欠了她的幸福，更毁了她的后来。

然而这令人痛心，且震撼的结局却是非常合理的，慕容沣权倾一方，于天下予取予求，他要的东西从来没有的不到的，从来只有女人希望的到他的爱，从来没有人能让他哀求。成全与祝福，或许是他一辈子都学不到的学问。。。

爱上

真正聪明的人，

会爱上一个爱自己的人。

不够聪明的人，

会爱上一个不爱自己的人。

什么才是真，什么才是假？

到底
什么才是真的，
什么才是假的？

你愿意相信的就是真的，
你不愿相信的就是假的。