What is dividend Policy ?What is dividend Policy ?

The decision to pay out earnings The decision to pay out earnings versus retaining and reinvesting themversus retaining and reinvesting them

Dividend policy includes :Dividend policy includes :

High or low dividend payout ? High or low dividend payout ? Stable or irreguler dividends? Stable or irreguler dividends?

How frequent to pay dividends ?How frequent to pay dividends ?

Announce the policy?Announce the policy?

Do investors prefer high or low Do investors prefer high or low dividend payouts?dividend payouts?

Three theories of dividend policyThree theories of dividend policy

Dividend irrelevance : Investor don’t care Dividend irrelevance : Investor don’t care about payoutabout payout

Bird in-the-hand : Investors prefer a high Bird in-the-hand : Investors prefer a high payout.payout.

Tax preference : Investors prefer a low Tax preference : Investors prefer a low payout.payout.

Bird-in-the hand theoryBird-in-the hand theory

Investors think dividends are less risky than Investors think dividends are less risky than potential future capital gains, hence they like potential future capital gains, hence they like dividends.dividends.

If so, investors would value high payout firm If so, investors would value high payout firm more highly, i.e., a high payout would result more highly, i.e., a high payout would result in a high Pin a high P00..

Teori Ketidak relevanan Dividen, Bird-in-the hand, dan Teori Ketidak relevanan Dividen, Bird-in-the hand, dan Prefensi PajakPrefensi Pajak

Bird in the hand

MM: Ketidakrelevanan

Preferensi pajak

Pembayaran

Harga Saham, Po ($)

50% 100%

30

20

10

0

40

Teori Ketidak relevanan Dividen, Bird-in-the hand, dan Teori Ketidak relevanan Dividen, Bird-in-the hand, dan Prefensi PajakPrefensi Pajak

Preferensi pajak

MM : Ketidakrelevanan

Bird in the hand

Pembayaran

Biaya Ekuitas = Ks (%)

11,25

15

22,5

50% 100%

Alternatif kebijakan pembagian dividenAlternatif kebijakan pembagian dividen

Persentase Persentase pembagianpembagian

Persentase Persentase yang ditahanyang ditahan

DPSDPS gg

0%0% 100%100% $ 0$ 0 15%15%

50%50% 50%50% $ 2,25$ 2,25 7,5%7,5%

100%100% 0%0% $ 4,5$ 4,5 0%0%

Kemungkinan situasi (hanya satu yg bisa Kemungkinan situasi (hanya satu yg bisa direalisasikan)direalisasikan)

MM:KetidakrelevananMM:Ketidakrelevanan Bird-in-the handBird-in-the hand Preferensi PajakPreferensi Pajak

PP00 D/PD/P00 ksks PP00 D/PD/P00 ksks PP00 D/PD/P00 ksks

$30$30 0,0%0,0% 15%15% $30$30 0,00%0,00% 15%15% $30$30 0,0%0,0% 15%15%

$30$30 7,5%7,5% 15%15% $35$35 6,436,43 13,9313,93 2525 9%9% 16,5%16,5%

$30$30 15%15% 15%15% $40$40 11,2511,25 11,2511,25 2020 22,522,5 22,5%22,5%

Catatan:

Nilai buku=nilai pasar awal=$30 persaham

ROE=15%,EPS=$30(0,15)=$4,5,g=(%yg ditahan)(ROE)=(% yg ditahan)(15%),contoh pada pembagian 50% g=0,5(15%)=7,5%

ks = Hasil dividen+laju pertumbuhan.

Which theory is most correct ?Which theory is most correct ?

Emphirical testing has not been able to Emphirical testing has not been able to determine which theory, if any, is correct.determine which theory, if any, is correct.

Thus, managers use judgment when Thus, managers use judgment when setting policy.setting policy.

Analysis is used, but it must be applied Analysis is used, but it must be applied with judgment.with judgment.

What`s the “information content,” or What`s the “information content,” or signaling Hypothesis ?signaling Hypothesis ?

Managers hate to cut dividends, so they Managers hate to cut dividends, so they won`t raise dividends unless they think won`t raise dividends unless they think raise is sustainable. So, Investors view raise is sustainable. So, Investors view dividend increases as signals of dividend increases as signals of management`s view of the future.management`s view of the future.Therefore, a stock price increase at time of Therefore, a stock price increase at time of a dividend increse could reflect higher a dividend increse could reflect higher expectations for future EPS, not a desire expectations for future EPS, not a desire for dividendsfor dividends

What is the “residual dividend What is the “residual dividend model”?model”?

Find the retained earnings needed for the Find the retained earnings needed for the capital budget.capital budget.

Pay out any leftover earnings (the Pay out any leftover earnings (the residual) as dividends.residual) as dividends.

Thus policy minimizes flotation and equity Thus policy minimizes flotation and equity signaling cost, hence minimizes the signaling cost, hence minimizes the WACCWACC

Residual dividend modelResidual dividend model

Dividends =Dividends =

Capital budget : $800,000Capital budget : $800,000

Target Capital Struktur : 40% debt,60%equityTarget Capital Struktur : 40% debt,60%equity

Forecasted net income $600,000Forecasted net income $600,000

How much of the forecasted net income How much of the forecasted net income should be paid out as dividends?should be paid out as dividends?

How much DPR ?How much DPR ?

target target equity equity ratio ratio

Total Total capital capital budgetbudget

Net Net Income Income

x-

Residual dividend model : Calculating Residual dividend model : Calculating dividends paiddividends paid

Calculate portion of capital budget to be funded by Calculate portion of capital budget to be funded by equityequity

- Of the $800.000 capital budget, - Of the $800.000 capital budget, 0,6($800.000)=$480,000 will be funded with equity.0,6($800.000)=$480,000 will be funded with equity.

- Calculate exess or need for equity capital.- Calculate exess or need for equity capital. with net income of $600.000,there is more than with net income of $600.000,there is more than

enough equity to fund the capital budget. There will enough equity to fund the capital budget. There will be $600.000-$480,000 =$120,000 leftover to pay be $600.000-$480,000 =$120,000 leftover to pay as dividends.as dividends.Calculate dividend payout ratio :Calculate dividend payout ratio :

$120,000/$600,000 = 0,20 = 20%$120,000/$600,000 = 0,20 = 20%

What`s a”dividend reinvesment What`s a”dividend reinvesment plan (DRIP)”?plan (DRIP)”?

Shareholders can automatically reinvest Shareholders can automatically reinvest their dividends in shares of the company`s their dividends in shares of the company`s common stock. Get more stock than cashcommon stock. Get more stock than cash

There are two types plans :There are two types plans :

- Open Market- Open Market

- New Stock- New Stock

Setting Dividend PolicySetting Dividend Policy

Forecast capital needs over a planning Forecast capital needs over a planning horizon,often 5 yearshorizon,often 5 years

Set a target capital structure.Set a target capital structure.

Estimate annual equity needsEstimate annual equity needs

Set target payout based on the residual Set target payout based on the residual model.model.

Generally, some dividend growth rate Generally, some dividend growth rate emerges. Maintain target growth rate if emerges. Maintain target growth rate if possible,varying capital structure somewhat if possible,varying capital structure somewhat if necessary.necessary.

Stock RepurchasesStock Repurchases

Buying own stock back from stockholdersBuying own stock back from stockholders

Reasons for Repurchases :Reasons for Repurchases :

- As an alternative to distributing cash as - As an alternative to distributing cash as dividendsdividends

- To dispose of one time cash from an - To dispose of one time cash from an asset saleasset sale

- To make a large capital structure change- To make a large capital structure change

Advantages of RepurchasesAdvantages of Repurchases

Stockholders can tender or notStockholders can tender or not

Helps avoid setting a high dividend that cannot Helps avoid setting a high dividend that cannot be maintainedbe maintained

Repurchased Stock can be used in takeovers or Repurchased Stock can be used in takeovers or resold to raise cash as neededresold to raise cash as needed

Income received is capital gains rather than Income received is capital gains rather than higher-taxed dividends.higher-taxed dividends.

Stockholders may take as a positive signal Stockholders may take as a positive signal management thinks stock is undervalued.management thinks stock is undervalued.

Pengaruh dari Pembelian Kembali Pengaruh dari Pembelian Kembali SahamSaham

EPS saat iniEPS saat ini

= Total laba / Jumlah saham=$4,4 juta/1,1 juta =$4 = Total laba / Jumlah saham=$4,4 juta/1,1 juta =$4 per sahamper saham

Rasio P/E = $20/$4= 5 kaliRasio P/E = $20/$4= 5 kali

EPS sesudah pembelian kembali 100.000 saham EPS sesudah pembelian kembali 100.000 saham =$4,4 juta/1 juta = $4,4 per saham=$4,4 juta/1 juta = $4,4 per saham

Harga pasar yang diharapkan sesudah pembelian Harga pasar yang diharapkan sesudah pembelian kembali = (P/E0(EPS)=(5)($4,4) = $22 per sahamkembali = (P/E0(EPS)=(5)($4,4) = $22 per saham

Stock dividends vs Stock SplitsStock dividends vs Stock Splits

Stock dividend : Firm issues new shares in lieu Stock dividend : Firm issues new shares in lieu of paying a cash dividend. If 10%, get 10 shares of paying a cash dividend. If 10%, get 10 shares for each 100 shares owned.for each 100 shares owned.

Stock Splits : Firm increases the number of Stock Splits : Firm increases the number of shares outstanding, say 2:1. Sends shares outstanding, say 2:1. Sends shareholders more sharesshareholders more shares

Both stock dividends and Stock Splits increase Both stock dividends and Stock Splits increase the number of shares outstanding, so “the pie is the number of shares outstanding, so “the pie is divided into smaller pieces.” divided into smaller pieces.”

Stock dividends vs Stock SplitsStock dividends vs Stock Splits

Unless the stock dividends or Splits Unless the stock dividends or Splits conveys information, or is accompanied by conveys information, or is accompanied by another event like higher dividends, the another event like higher dividends, the stock price falls so as to keep each stock price falls so as to keep each investor`s wealth unchanged.investor`s wealth unchanged.

But split/stock dividends may get us to an But split/stock dividends may get us to an “optimal price range.”“optimal price range.”

Faktor-faktor yang mempengaruhi Faktor-faktor yang mempengaruhi kebijakan dividenkebijakan dividen

Kontrak HutangKontrak Hutang

Pembatasan Saham PreferenPembatasan Saham Preferen

Ketidak cukupan labaKetidak cukupan laba

Ketersediaan KasKetersediaan Kas

Denda Pajak atas penahanan laba yang Denda Pajak atas penahanan laba yang tidak wajartidak wajar

EPS,Cash Flow,DPSEPS,Cash Flow,DPS

DPS

EPS

CFPS

Dollar

Year

Bahan diskusiBahan diskusi

Mengapa perusahaan dengan tk pertumbuhan yg tinggi Mengapa perusahaan dengan tk pertumbuhan yg tinggi cenderung memiliki rasio pembayaran dividen yg rendah cenderung memiliki rasio pembayaran dividen yg rendah dan perush dg tk pertumbuhan yg rendah cenderung dan perush dg tk pertumbuhan yg rendah cenderung memiliki rasio pembayaran dividen yg tinggi ?memiliki rasio pembayaran dividen yg tinggi ?

Sebutkan keunggulan dan kelemahan dari kebijakan Sebutkan keunggulan dan kelemahan dari kebijakan pembayaran dividen stabil perlembar saham dan rasio pembayaran dividen stabil perlembar saham dan rasio pembayaran dividen stabil sebagai kebijakan dividen pembayaran dividen stabil sebagai kebijakan dividen perusahaan !perusahaan !

Berikan definisi dividen saham dan pemecahan saham. Berikan definisi dividen saham dan pemecahan saham. Apa pengaruhnya thd nilai saham ?Apa pengaruhnya thd nilai saham ?

Apa yang dimaksud dengan rencana investasi kembali Apa yang dimaksud dengan rencana investasi kembali dividen dan bagaimana rencana ini membantu para dividen dan bagaimana rencana ini membantu para pemegang sahampemegang saham