Corporate Dividend Policy: The Views of British Financial Managers

Abstract:   Using a survey approach, this paper examines the importance and relevance of the various theories of dividend policy for UK companies. Further, it evaluates the extent to which corporate characteristics such as size and industry influence managerial responses to the survey. In general, the results support dividend hypotheses relating to signalling and ownership structure, in preference to those about capital structure and investment decisions and agency issues. At a more detailed level, the cross sectional analysis reveals important differences between managers' responses, based on company size, industry sector, growth opportunities, ownership structure and information asymmetry.     

The management of exchange‐rate risk: A case from the manufacturing industry

This article looks into the management of exchange rate risk at a U.K.‐listed company. The focus is particularly on the firm's operating exchange risk, for which it uses a synthesis of three different risk management approaches. These include the use of long‐term financial hedging instruments, operational adjustments based on real options theory, and the currency denomination of debt. Practice at the case company is unique, in that the former approach has been considered inappropriate by the theoretical literature and the latter is seldom used to manage firms' real cash flow exposures. In general, it has important implications for multinationals, especially with reference to the use of operational adjustments and the currency denomination of debt. © 2004 Wiley Periodicals, Inc.