16-2 Topics Covered SHow Dividends are Paid SHow Do Companies decide on dividend Payments sWhy Dividend Policy Should Not matter SWhy Dividends May Increase Firm Value S Why Dividends May reduce Firm value Irwin/McGraw-Hill CThe McGraw-Hill Commpanies, Inc, 2001©The McGraw-Hill Companies, Inc.,2001 16- 2 Irwin/McGraw-Hill Topics Covered How Dividends are Paid How Do Companies Decide on Dividend Payments Why Dividend Policy Should Not Matter Why Dividends May Increase Firm Value Why Dividends May Reduce Firm Value