dividend dicision: appropriate distribution and retension policy

• clientele reaction
• debt converant
• cash amount in bank
• signalling to paydividend (signaficate effection)
• inflation 
• taxation
• investment policy(investment and finance decision)
• legal issues

FCFE   dividend capacity (theoritic approaches)

dividend decision application :

1. capital investment project

2. multinational corporation to plan transfer pricing strategy : parent and subsidiary (overseas) 

M&M theory assumption:

1. the perfact market

2. the value of the investment will not be change by the ways of dividend or retention to reinvestment which will rise the share price

3. no tax  nor transaction cost 

manufacture dividend means to sell share instead get dividend (subsititude ways either by receive dividend or sell share to earn capital return )