Proceedings of the First International Conference of Economics, Business & Entrepreneurship, ICEBE 2020, 1st October 2020, Tangerang, Indonesia

Research Article

Life Cycle Theory of Dividend: A Review Literature

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  • @INPROCEEDINGS{10.4108/eai.1-10-2020.2304742,
        author={Sri  Hasnawati},
        title={Life Cycle Theory of Dividend: A Review Literature},
        proceedings={Proceedings of the First International Conference of Economics, Business \& Entrepreneurship, ICEBE 2020, 1st October 2020, Tangerang, Indonesia},
        publisher={EAI},
        proceedings_a={ICEBE},
        year={2021},
        month={4},
        keywords={dividend life cycle theory},
        doi={10.4108/eai.1-10-2020.2304742}
    }
    
  • Sri Hasnawati
    Year: 2021
    Life Cycle Theory of Dividend: A Review Literature
    ICEBE
    EAI
    DOI: 10.4108/eai.1-10-2020.2304742
Sri Hasnawati1,*
  • 1: University of Lampung
*Contact email: sri.hasna2015@gmail.com

Abstract

The purpose of the paper is to examine the relationship between dividend policy of the company and the life cycle theory. According to the life cycle theory, the company will pay dividend in the third stage, namely the maturity stage. In the early stage, the company has investment opportunities with high profit potential so that it requires large funds. As a result, dividend payments will be delayed. However, dividend payments remain a matter of debate today because dividend payments will be associated with company value. The theory of dividend policy states that paying dividends will increase firm value, but several research results show that dividend payments are not related to firm value.