Lintner's model of Dividend Payment

Dividends are portion of corporate profits paid out to stockholders. The dividend decision is an integral part of a company`s financial decision making as it is explicitly related to other two major decisions-the investment decision and the financing decision. It involve “deciding how much dividend should be paid (payout ratio) and in what form should it be paid to the shareholders”. The decision is taken in the light of the investment opportunities available and the alternative financing options.