Explain the relationship between dividends and stock prices

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Question 1: Explain the relationship between dividends and stock prices with reference to the dividend discount model. As dividends are of two types i.e. cash dividends and stock dividends

Question 2: What are the reasons for giving either type of dividends and does giving of such dividends affect the stock price?

Question 3: Discussion about dividend yield and dividend payout ratio. Link in your answer a discussion of profits and retained earnings with dividends.

Question 4: Should you buy shares of firms that pay dividends or should you buy growth stocks; are firms that pay high dividends good or those that pay low dividends - why?

Reference no: EM132499679

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