Why dividend smoothing

Risk Management. Top Mutual Funds. Your Privacy Rights. To change or withdraw your consent choices for Investopedia.

At any time, you can update your settings through the "EU Privacy" link at the bottom of any page. These choices will be signaled globally to our partners and will not affect browsing data. We and our partners process data to: Actively scan device characteristics for identification. I Accept Show Purposes. Your Money. Personal Finance. Your Practice. Popular Courses. Economy Economics. What Is the Lintner Model? Key Takeaways The Lintner model is an economic formula for determining the optimal dividend policy for a firm.

The model focuses on the target dividend payout ratio and on the time it takes for increased dividends to prove stable. By following the model, a company's board of directors can easily evaluate the effectiveness of its dividend policy. Article Sources. Investopedia requires writers to use primary sources to support their work. These include white papers, government data, original reporting, and interviews with industry experts. Overall, our results suggest that firms following a stable dividend policy would have greater firm value than those not.

Article :. DOI: Need Help? You can also find out more about Emerald Engage. Visit emeraldpublishing. Answers to the most commonly asked questions here. To read the full version of this content please select one of the options below:. Other access options You may be able to access this content by logging in via your Emerald profile. Rent this content from DeepDyve.

Rent from DeepDyve. If you think you should have access to this content, click to contact our support team.