1. Introduction
Section outline
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Welcome to "Payout Policy!" The purpose module is to present a systematic approach for managers to navigate the two key questions surrounding the payout policy: How much money should the firm return to its shareholders? And how should cash be returned? This introductory section motivates the topic and presents the logic of the module.
The main learning goals of this module are:
- Understand the key questions surrounding the payout decision: How much to pay out, and how to return money to shareholders?
- Know the various forms of payout, in particular dividends and share buybacks.
- Know how and why payout matters.
- See how a firm's financing policy, investment policy, and payout policy are related.
- Know the relevant steps towards a sustainable payout policy.