Corporate Finance

(a) Market reacts positively to dividend increases and negatively dividend decreases. Three

explanations are provided for this notion.

  1. Information content (signalling) hypothesis,
  2. Free cash flow hypothesis

iii. Clientele effect

Discuss these hypotheses related to dividend policy.

(30 marks)

(b) Briefly discuss five reasons for companies to choose repurchases rather dividends under a

classical tax system.

(30 marks)

(c) Identify (interim or final) dividend change using “dividend history from the DatAnalysis

Premium Database” for the company allocated to you for the assignment 2.

A dividend change is defined as the relative difference from the previous year’s level.

  • Interim dividend change = interim dividend per share in year t minus interim dividend per share in

year t-1.

  • Final dividend change = Final dividend per share in year t minus Final dividend per share in year


Step 2

Announcement date for the dividend change can be identified from “ASX announcements from the

DatAnalysis Premium Database”.

  • Announcement date for interim dividend change: use the announcement date of half yearly


  • Announcement date for final dividend change: use the announcement date of preliminary final


  • Select “ASX announcements”
  • select “Search option – Click here to refine your search by ASX Announcement Type

and/or text search”

  • for Announcement Type: select periodic reports
  • for Sub-Announcement Type: select preliminary – final statement for final dividend; half

yearly report interim dividend change

  • specify the date rage

Step 3

(i)  Calculate three day return earned by your firm for the period from the day before the

announcement continuing through the day after the announcement date; and two day return earned

by your firm for the period from the day of the announcement to the day after the announcement


(ii)  Calculate the market return for the corresponding periods in (i).

(iii) Calculate the excess: (i) – (ii)

Step 4

Check the results for any other two students in your tutorial class and report that result in your

assignment 2

Step 5

Discuss the relevant theory with the findings in Step 3 and Step 4.

(40 marks)

(30 + 30 + 40 = 100 marks)

Order a unique copy of this paper
(550 words)

Approximate price: $22

Basic features
  • Free title page and bibliography
  • Unlimited revisions
  • Plagiarism-free guarantee
  • Money-back guarantee
  • 24/7 support
On-demand options
  • Writer’s samples
  • Part-by-part delivery
  • Overnight delivery
  • Copies of used sources
  • Expert Proofreading
Paper format
  • 275 words per page
  • 12 pt Arial/Times New Roman
  • Double line spacing
  • Any citation style (APA, MLA, Chicago/Turabian, Harvard)

Our guarantees

We value our customers, and so ensure that our papers are 100 percent original. Our Team of professionals does not miss the mark; they ensure that step by step each paper is written uniquely. We never duplicate or work as we compare papers rest assured. We deliver our work a day before time to ensure that you don’t miss your deadlines. It is not only doing the work but delivering it at the right time. We capture the consequences of late remittances. .

Money-back guarantee

We value customer satisfaction here at and make sure that you get the best value for your Money. It happens that sometimes you can pay twice for your order or may want to cancel it, or you feel that it doesn’t meet your requirements; our money back guarantee will give you the opportunity to get back your money. We will also refund 100% of money paid double. In case your paper does not satisfy your requirements , we request that you notify us via writing within 2 days otherwise on the third day we will assume that you have been satisfied. Do all your correspondences through our email address

Read more

Zero-plagiarism guarantee

At, our professional writers know the consequence plagiarism does for our clients. We have updated software’s such as article checker and copyscape to check for originality of the custom papers before submission of the final paper to the you. Our guarantee to the customer is that we will write 100% original papers for them that are quality, timely and of low cost. We have experienced professional and competent PhD writers who will write quality custom papers for you..

Read more

Free-revision policy

. At, we are proud to provide top-quality Essay writing service to our esteemed customers. We are ready to take up that challenging academic assignment that is giving you sleepless nights and simplify it for you according to your desired requirements. We are willing to revise your paper if it does not meet your requirements. At, we do not compromise with quality; thus, we offer unlimited free revisions until the customer is satisfied with their custom paper. Our unlimited free revision services are provided under the following terms:.. .

Read more

Privacy policy knows that client’s information is an essential tool for our company. It means that whatever the client requests from our service is kept strictly confidential. It means that whoever writes for this company understands the terms and conditions hence you should not be worried because you will never see your work somewhere else...

Read more

Fair-cooperation guarantee

Rest assured that we will always be attentive to your needs and requirements. We belief in the phrase treat your neighbour as you would want them to treat you. We leave nothing to chance and always look forward to a good interaction with each other.. .

Read more

Calculate the price of your order

550 words
We'll send you the first draft for approval by September 11, 2018 at 10:52 AM
Total price:
The price is based on these factors:
Academic level
Number of pages