ABSTRACT
REMARK The selection of the dividend formula depends on the philosophy which is adopted for the ultimate purpose of the management. De Finetti (1957) and later Borch in numerous papers and many other authors have posed the problem of what the business strategy should be that gives a maximal profit to the shareholders, for example, in terms of the sum of discounted future dividends. In this kind of problem the dividend term has a central role, suggesting the profit-related formula (11.3.1). Business strategies, in theory and practice, will be discussed later in section 14.5, concluding that a balanced appreciation of shareholders', policyholders' and public interest leads to a formula of type (11.3.3).
