摘要：In Limited Companies, there is a separation position between owners and managers in terms of their responsibilities. The managers have to run the company to achieve optimum return on investment (ROI) intended to increase company’s stocks prices. On the other side, the owners will supervise and control company’s performance through the achievement of ROI level. The performance of ROI is determined through dividend policies taken by the managers, and its purpose is to maintain stability of company’s stocks prices and value. It is essential that decisions taken in dividend policies have to consider both the owners and managers in order to avoid negative impact for the company. There are several dividend theories and policies that can be considered to decide which one is absolutely appropriate for the company, although there is still a possibility of obstacles. These are clientele dividend theory, relevant and irrelevant dividend, and residual. Each policy has its own risk, and it is important to remember that there is no policy that provides advantages for everyone. The managers have to decide the best policies to minimize losses and risks for the parties involved. Empirical research findings revealed that the managers have to find out which one is relevant to their situation faced, either internally or externally. The dividend policy taken is related to company’s investment financing capability. Several interrelated factors that have to be considered are the amount of dividend received by the owners, company’s financing expansion, and internal and external constraints of the company. Financing investment comes from retained earning, while dividend paid-out comes from long-term debt obtained from company’s stocks or bonds sold at capital market. Steps in external financing through agency model about outcome and substitution implemented by the managers including dividend policy taken, investment, and systematic financing are intended to the advantage of all parties involved.
关键词：dividend policy; dividend theory; and financing policy
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