Therefore, the management of a company is not justified in giving up profitable investments to meet the potential demands of investors in order to increase dividends. Indeed, if the dividends influence the stock price will probably be because investors want to minimize or defer taxes and minimize agency costs. For if the expectations theory holds, will allow the company policy to avoid surprise to shareholders when there is a decision on dividends (Bernheim and Wantz 1995, p. 532). Similarly, the dividend policy can be treated as a residual long-term after management considers the needs of long-term investment. This, in turn, would establish a rate of benefit-sharing “framework” on which to stick.
There are theories that tell us that the dividends will not influence the stock price, especially because the market does not discount any information and action because buyers do not seek profit through dividends but through action resold in the secondary market (marginalist theory) (Gustavo 2002, p. 387). The dividend policy is irrelevant because it has no effect on shareholder wealth in a world without taxes, asymmetric information or agency costs and transaction costs. The value of the firm depends only on the distribution of future cash flows from investment projects. The key argument of Modigliani and Miller is that investment decisions are completely independent of dividend policy. The firm can pay dividends at any level you want without affecting investment decisions (Gustavo 2002, p. 389).