Can embracing a scrip dividend scheme foster individual shareholders' value? Endesa's case

• Autor(a) principal: Moedas, Miguel Costa
• Data de Publicação: 2013
• Tipo de documento: Dissertação
• Idioma: eng
• Título da fonte: Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos)
• Texto Completo: http://hdl.handle.net/10071/7365
• topic: Dividend reinvestment plan; Scrip dividend; Endesa; Avaliação -- Evaluation

Dividend policy is the ultimate key decision that the management body has to hold. Eventually, this will have an impact on how shareholders will manage their wealth. Until recently in Iberia, companies used an old-school approach to address this issue. Specifically, management would be the only decision-taker on whether the company would distribute its results or reinvest them in value-added projects. With the emergence of a dividend reinvestment plan called scrip dividend, the company would get closer to their sole proprietors and would enable them to play a more important role in deciding how they want to receive their company’s earnings. This project presents evidence on the consequences of introducing this scheme in the Spanish utility Endesa. By letting shareholders assume command of such an important decision, management faces the risk of not being able to forecast accurately the consequences of such act, but would certainly introduce the possibility of improving the company’s financial situation by reducing th e outflows related to dividend payments.