Explain the Theory Behind the Dividends Valuation Approach

question 5

Essay

Explain the theory behind the dividends valuation approach.Why are dividends value-relevant to common equity shareholders?

---

Definitions:

Journal Entry

A record in the books of accounts that represents a business transaction and its effects on the company's finances.

Journal Entry

A record in accounting that represents a transaction and its effect on various accounts, used to transfer amounts from one account to another.

Profit and Loss Ratio

A financial metric that measures a company's profitability by comparing its profits and losses over a specific period.

Other Assets

Assets that do not fit into the standard categories of current or long-term assets, often including long-term investments, patents, or deposits.