Model of Deferred Advantage or Disadvantage from Reinvestment – Methodical Problems
AbstractThe article deals with methodical problems connected with model of deferred advantage (or disadvantage) from reinvestment. The advantage shall be understood as a difference in shareholder’s wealth resulting from the situation when the corporate profits are ploughed back into business operations rather than distributed among shareholders in form of dividends. If negative figures are the case, it is dealt with deferred disadvantage. Main methodical problems represent a) form of shareholder’s income (dividend payment versus capital gains), b) number of periods, c) fixed versus proportional return on capital, and d) tax aspects. On base of Masulis and Trueman paper (1988) optimal dividend payout ratio was also proposed.
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Bibliographic InfoArticle provided by University of Economics, Prague in its journal Český finanční a účetní časopis.
Volume (Year): 2008 (2008)
Issue (Month): 3 ()
Postal: Český finanční a účetní časopis, Vysoká škola ekonomická v Praze, nám. W. Churchilla 4, 130 67 Praha 3
Find related papers by JEL classification:
- G35 - Financial Economics - - Corporate Finance and Governance - - - Payout Policy
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Masulis, Ronald W. & Trueman, Brett, 1988. "Corporate Investment and Dividend Decisions under Differential Personal Taxation," Journal of Financial and Quantitative Analysis, Cambridge University Press, vol. 23(04), pages 369-385, December.
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