LINTNER Meaning and
Definition
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Lintner is a term commonly used in the field of finance and investments, specifically to refer to John Lintner, an influential economist and financial scholar. It is often used to describe a set of principles and theories related to the behavior of dividend policies and the relationship between dividends and corporate earnings.
According to Lintner's dividend model, a company's dividend policy is determined by its target payout ratio, which reflects the proportion of earnings allocated to dividends. Lintner's research suggests that companies tend to maintain a stable dividend policy, and are reluctant to change it even when faced with fluctuating earnings. This theory implies that firms will smooth dividend payments over time, adjusting them gradually to find a balance between satisfying shareholders' expectations and retaining funds for future growth opportunities.
The Lintner model is widely referenced in financial literature and has been a foundation of modern dividend policy theories. It emphasizes the importance of continuity and stability in dividend payments, highlighting the tendency of companies to buffer changes in earnings by adjusting dividends gradually. Scholars and practitioners often study the Lintner model to gain insights into the factors influencing dividend decisions and their implications for investors.
In summary, Lintner refers to John Lintner's influential work on dividend policies, which focuses on principles such as target payout ratios, continuity, and stability of dividend payments. It has shaped the understanding of dividend behavior in corporate finance and investments.
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