Dividend Policy Modeling in Neutral Implementation Approach Conditions

2020 Research Journal of Finance and Accounting  
The article treats a concept of the formalized modeling of the dividend policy scores and company marketing performance scores derived (stock market position) within neutral dividend policy implementation approach conditions as an instrument of the scores analysis and forecasting. The methodology of the research consists of the Dividend Irrelevance theory, Dividend Policy Significance theory and sustainable company development concept. It has been stated that a formalized approach of the
more » ... d policy implementation presumes a construction of the basic relevent scores models characterizing the company dividend policy and its marketing performance as Dividend Payout, Dividend Cover, expected Share Price, Dividend Yield, Price / Earnings Ratio (common stock price/earnings ratio). The formalized models of the scores mentioned are applicable for a forecast-analytical scores evaluation and their variances as well by estimating an impact of the models defining factors exercised by the appropriate factoring analysis method within the neutral dividend policy implementation approach conditions. The conclusion is drawn, that the formalized models of the dividend policy scores and company marketing performance scores derived, having been developed, are an effective instrument for their forecasting and analysis so that proactive decisions to manage the company dividend policy implementation within neutral approach conditions are ensured. Thirdly, the dividend payout leads generally to cash outflow resulting in the company liquidity decline. Fourthly, the Dividend Payout results in the retained earnings reduction, mentioned earlier, decreasing the equity capital and company financial stability. Meanwhile, the dividend policy on the one hand has to ensure the basic financial management goal to be attained, i.e., the maximum shareholders well-being, on the other, take into account all company stakeholders' interests. Therefore, the dividend policy management developing and justifying, an important role is paid to the formalized analysis and forecasting of the scores related to the requirements stated above.
doi:10.7176/rjfa/11-14-16 fatcat:nvygb7db4vh57enaxjfwzv6caa