41.   Suppose that a firm decided never to pay dividends, preferring instead to reward shareholders entirely through capital gains.

42.   In other words, the value of a share comes from its ability to pay dividends, because it is dividends that finance consumption.

43.   Even if a share does not pay dividends temporarily, it must eventually pay dividends to have any value.

44.   The third explanation for paying dividends involves the tax clientele effect.

45.   Why do firms pay dividends?

46.   It is worth noting that dividends are paid to shareholders net of basic rate income tax.

47.   In the situation where the tax system is more favourable to capital gains, then there is an incentive not to pay dividends.

48.   On the basis of the results obtained in part critically discuss the effects of the rate of dividend growth and systematic risk on equity prices.

49.   This is farmore likely to gain management approval because managers can see the expensive exercise paying dividends in a reasonable time scale.

50.   One thing is certain, as the competition increases, worldwide reputation for quality and service will pay dividends.