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Abstract This thesis is comprised of three essays in finance. This first essay discusses payout policy with a main focus on testing Lintner payout model using data of 50 UK public companies from 1983 to 2013. It begins with a review of dividend literature, most importantly Miller and Modigliani proposition that dividend policy does not affect the firm value, under some assumptions. These assumptions will be relaxed and their consequences will be analysed. Next, companies dividend policies over a period of 31 years will be discussed. After that, Lintner dividend model will be tested. The model proves its validity where current level of earnings and lagged dividends are the main determinants of changes in dividends. In the second research, the financial performance of Meggitt PLC is evaluated in relation to other companies in the industry using ratio analysis. In addition, the capital structure and the dividend policy of the firm will be evaluated. Finally, the share value will be derived using Free Cash Flow (FCF) model, dividends discount model, earning model, and using comparable firms. According to the different models, the share is overvalued in the market. In the third research, I am exploring the problems of mean-variance framework in optimising portfolios. I compare between Markowitz (1952) portfolio and 1/N strategy, and I support Markowitz model. Then, I discuss two groups of tools that can help enhance the performance of the model. I advocate the first group including shrinking the inputs of the model and imposing constraints on weights. I am not in favour of the second group which calls for active portfolio management. |