The document discusses the dividend decision as one of the four major finance decisions a firm must make. It summarizes the dividend process and different types of dividend actions like bonus shares, stock splits, and share buybacks. It also discusses the impact of dividends on shareholders in terms of taxes. The document then discusses the dividend irrelevance theory proposed by Miller and Modigliani that the value of a firm is not affected by whether it pays dividends or retains earnings. It provides an example to illustrate how the value of the firm remains the same under both scenarios.

1. The Dividend Decision

3. The 4 Major Finance Decisions LIABILITIES ASSETS FIXED LIABILITIES FIXED ASSETS Equity Land Debt Building Retained Earnings Plant/ Machinery CURRENT LIABILITIES CURRENT ASSETS Creditors Debtors Bills Payable Cash Financing Investment Working Capital Profits Profit Distribution

13. Interactive Session