Browse CFA Level 1

Chapter 1: Dividends and Share Repurchases

Chapter 1: Dividends and Share Repurchases (CFA Level 1): Key concepts, definitions, and exam tips with practical examples. Use it to reinforce intuition and avoid common pitfalls.

In this section

  • Dividend Policies (Stable, Residual, Hybrid)
    Dividend Policies (Stable, Residual, Hybrid) (CFA Level 1): Rationale and Theoretical Underpinnings, Stable Dividend Policy, and Key Considerations. Key definitions, formulas, and exam tips.
  • Theories of Dividends (Miller–Modigliani, Bird-in-the-Hand, Tax Preferences)
    Theories of Dividends (Miller–Modigliani, Bird-in-the-Hand, Tax Preferences) (CFA Level 1): Miller–Modigliani Dividend Irrelevance Theory, Limitations and Real-World Adjustments, and Bird-in-the-Hand Theory. Key definitions, formulas, and exam tips.
  • Share Buybacks and Their Impact on Shareholder Value
    Share Buybacks and Their Impact on Shareholder Value (CFA Level 1): Understanding Share Buybacks, Methods of Execution, and Motivations for Share Buybacks. Key definitions, formulas, and exam tips.
  • Dividend Reinvestment Plans and Stock Splits
    Dividend Reinvestment Plans and Stock Splits (CFA Level 1): Dividend Reinvestment Plans (DRIPs), Key Characteristics and Benefits, and Practical Considerations and Tax Implications. Key definitions, formulas, and exam tips.
  • Signaling Effect of Dividends
    Signaling Effect of Dividends (CFA Level 1): Understanding the Signaling Theory, Why the Market Reacts Strongly, and Dilemma of Unsustainable Dividends. Key definitions, formulas, and exam tips.
  • Employee Share Ownership Plans and Stock Compensation
    Employee Share Ownership Plans and Stock Compensation (CFA Level 1): Why Employee Ownership Matters, Understanding ESOPs, and Corporate Governance and ESOPs. Key definitions, formulas, and exam tips.
  • Clientele Effect of Dividends
    Clientele Effect of Dividends (CFA Level 1): Defining the Clientele Effect, How It Connects to Chapter Concepts, and Key Theoretical Underpinnings. Key definitions, formulas, and exam tips.
  • Payout Ratios and Sustainable Growth
    Payout Ratios and Sustainable Growth (CFA Level 1): Understanding Payout Ratios, Why It Matters, and Retention Ratio (Plowback Ratio). Key definitions, formulas, and exam tips.

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Chapter 7: Business Models
Chapter 9: Corporate Combinations, Restructuring, and Other Actions