- 10 Marks
AFM – May 2018 – L3 – Q5a – Dividend policy in multinationals and transfer pricing
Discussing why share prices plunge when multinational companies suspend paying dividends and outlining theories of dividend policy.
Question
Recently, some multinational companies have suspended paying dividends. If, as some say, dividends are irrelevant, why have share prices plunged in most of these companies?
Required:
In your answer, outline both dividend policy theory and relevant examples.
Find Related Questions by Tags, levels, etc.
- Tags: Dividend Policy, Dividend relevance, Share Price, Theories of Dividend
- Level: Level 3
- Topic: Dividend policy in multinationals and transfer pricing
- Series: MAY 2018
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