According to the Miller Modigliani model of dividend theory, shareholders need not depend solely on dividends provided by the parent company to raise cash. They can sell their shares in the market to get the money they want. This is known as a Homemade Dividend because the part of cash ... Read More

Companies use their net earnings either to keep them as retained earnings or to distribute them as dividends. The need for retained earnings or dividend payout is solely a matter of management's decision. However, in the case of a conflict to choose between the two, it is up to the ... Read More

Myron Gordon proposed a dividend model that included some more assumptions than the Walter's model. Gordon's model increased the assumptions of Walter's model and it reflected the evaluation of projects of those firms that have palpable tax and cost of capital greater than growth rate.Gordon's model has all the assumptions ... Read More

John Lintner was a professor at the Harvard Business School who had researched on the factors that guide a company's dividend payout policy. Lintner came up with a formula for determining an optimal corporate dividend policy. His dividend policy model is founded on the principle that all companies tend to ... Read More

What are Ordinary Shares?Ordinary shares are tools that provide the investors the ownership rights to a company. There are two types of shares available for purchase −Ordinary SharesPreference SharesPreference shares are treated before the ordinary shares in case a company goes into liquidation.Attributes of Ordinary SharesInvestors can buy or sell ... Read More

Open-end and closed-end mutual funds are sub-divided into certain categories depending on their objectives. The objective of mutual funds is an important parameter because most mutual fund investors have specific aims when they invest in MFs. Therefore, the types of mutual funds vary with the primary objectives of the funds.Income FundsThe ... Read More

It is observed that in most of the hypotheses of dividends and shares, analysts consider the capital markets to be efficient. However, from the point of view of an investor, there are no markets in the world that can be regarded as perfectly efficient. In fact, it is hard to ... Read More

Authorized, Issued, Subscribed, and Paid-up capital are issues related to the reporting of shares. It is important to divide the total capital earned from the share market into Authorized, Issued, Subscribed, and Paid-up capital to measure the various attributes of a share. These factors may affect the book value of ... Read More

Usually, all types of securities are traded in capital markets. Therefore, capital markets perform their duties as a place of security exchange and trade without any limits of investments.Capital markets usually perform the following two functions −Maintain LiquidityMaintain Fair Price of SecuritiesLet's discuss these two major functions of capital market ... Read More

Bonus shares are additional shares that a company issues to its existing shareholders based on their existing holding in the company. Companies normally issue Bonus shares when they are not able to pay a dividend to their shareholders due to shortage of funds. In such cases, companies issue bonus shares ... Read More