Corporate Finance: Theory suggests that the dividend policy of a firm is irrelevant. Is this statement correct Discuss the theory of the clientele effect This paper has shown that dividend policies of companies has limited significance to investors, because while some investors prefer low dividend policy, obviously for their personal needs, others prefer high payout policy, and would invest in companies for such reasons. The dividend policy of companies thus has both negative and positive attributes. Stock prices would generally rise with unexpected increases in dividend payouts, and fall with unexpected decreases in dividend payouts. Either case does not explain the financial position of the company.[8 Pages, 6 Sources] Pages: 6 Bibliography: 6 source(s) listed Filename: 16587 Dividends Payout Policies.doc Price: 53.70

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