Cateringowa teoria dywidend
Catering theory of dividends

Summary/Abstract: One of the newest theories describing the process of making decision by a company about dividend payment is catering theory of dividends worked out by M. Baker and J. Wurgler according to which managers rationally cater to investor demand. They pay dividends when investors value highly companies which pay dividends and they do not pay when investors prefer companies which do not pay. A basic category of this theory is dividend premium based on market valuation of companies which pay dividends and these which do not pay. It is assumed that the growth of value of dividend premium favours the growth of the propensity to pay dividends by companies. In this paper an appraisal of usefulness of catering theory of dividends for explaining the decision about dividend payments by companies quoted on the Warsaw Stock Exchange was made.

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