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| Preface | |
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| Introduction | |
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| Does Anyone Really Pay Attention to Dividends? (Or, Why Should I Care?) | |
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| A Short History of Dividend Policy | |
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| Summary of the Evolution of Dividends | |
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| Profits, Dividends, and Capital Expenditures | |
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| Dividend Returns versus Total Common Stock Returns | |
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| Dividend Yields | |
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| Dividend Declaration | |
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| The Dividend Puzzle | |
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| Where We Are Headed | |
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| Stock Valuation | |
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| Capital Gains versus Dividends | |
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| Stylized Examples of the Impact of Investment Horizon | |
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| The Case of Four One-Year Owners | |
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| The Case of One Four-Year Owner | |
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| Summary | |
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| Common Stock Valuation Example | |
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| Dividend Policy and Share Price | |
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| Common Stock Valuation Model | |
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| Dividend Policy and Owners' Wealth | |
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| What We Really Mean | |
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| Stylized Examples of Residual and Managed Dividend Policies | |
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| Dividend Policy and the Miller/Modigliani Conclusion | |
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| The MandM Intuition | |
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| What if the share price drops by less than the extra dividend paid? | |
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| What if the share price drops by more than the extra dividend paid? | |
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| The Dividend Policy Controversy | |
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| Dividend Policy and Owners' Wealth | |
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| Miller and Modigliani | |
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| Perfect Capital Markets (PCM) | |
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| Dividend Policy under PCM and Certainty | |
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| Dividend Policy under PCM and Uncertainty | |
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| Summary of Dividend Policy under PCM | |
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| An Introduction to Imperfect Capital Markets | |
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| Homemade Dividends and Costless Financing | |
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| Transaction Costs | |
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| Qualifications on the Impact of Transaction Costs | |
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| Flotation Costs | |
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| Behavioral Explanations for Dividend Policy Relevance | |
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| Conclusions | |
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| Dividends and Taxes | |
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| The Tax Environment | |
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| Dividend Yields and Risk-Adjusted Returns | |
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| The Theory | |
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| The Evidence | |
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| The Black-Scholes Experiment | |
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| The Litzenberger and Ramaswamy Experiment | |
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| BandS versus LandR | |
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| The Miller and Scholes Critique | |
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| The Ex-Dividend Day Studies | |
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| The Theory | |
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| The Evidence | |
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| Ex-Dividend Day and Cross-Sectional Studies | |
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| The LandR Experiment Revisited: Time Series or Cross-Sectional Return Variations? | |
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| Tax Effects and Time Series Return Variations | |
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| Tax-Induced Clienteles: Empirical Evidence | |
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| Implications of Ex-Dividend Day Studies | |
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| The Case of Citizens Utilities | |
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| Conclusions | |
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| Dividend Policy and Agency Problems | |
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| Agency Relationships | |
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| Agency Relationships and Dividends | |
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| Shareholders versus Debt Holders | |
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| The Differential Impact of Dividends | |
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| Dividend Restrictions | |
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| Similar Conflicts | |
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| Shareholders versus Managers | |
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| Ownership versus Control | |
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| The Easterbrook Analysis | |
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| The Jensen Analysis | |
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| Managerial Compensation | |
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| Empirical Evidence on Agency Problems and Dividends | |
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| Shareholders and Debt Holders | |
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| Shareholders and Managers | |
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| Conclusions | |
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| The Differential Impact of Dividends on Shareholders and Bondholders | |
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| Dividend Policy and Asymmetric Information | |
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| Perfect Capital Markets and Information | |
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| Signaling Models | |
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| Signaling with Dividends | |
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| Numeric Examples | |
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| "Better" Firm--No Dividend Case | |
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| "Better" Firm--Dividend Case | |
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| "Poorer" Firm--No Dividend Case | |
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| "Poorer" Firm--Dividend Case | |
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| Summary | |
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| John and Williams Model | |
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| Bhattacharya Model | |
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| Miller and Rock Model | |
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| Other Theoretical Models | |
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| Dividend Smoothing | |
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| Dividends versus Share Repurchases | |
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| Choice of Signals | |
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| Empirical Evidence | |
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| Announcement Effects | |
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| Changes in Market Expectations | |
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| Predictions of Future Earnings | |
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| Dividend Signaling Considering Investment Opportunities and Insider Trading | |
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| Lang and Litzenberger Study | |
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| John and Lang Study | |
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| Conclusions | |
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| Corporate Dividend Policy Decisions | |
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| Dividend Patterns of Individual Firms | |
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| The Lintner Survey | |
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| A Dividend Change Example | |
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| The Lintner Model | |
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| The Impact of Dividend Policy on Investment | |
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| Dividend Patterns of Individual Firms Revisited | |
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| Subsequent Dividend Model Research | |
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| Conclusions | |
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| Dividend Policy: The Global Perspective | |
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| Descriptive Statistics on Dividend Policies around the World | |
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| Dividend Size and Frequency | |
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| Institutional Features | |
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| Tax Differences | |
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| Dividend Payout Patterns around the World | |
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| Taxes and Dividend Payout Policies in Various Countries | |
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| Share-Price Behavior around Ex-Dividend Days | |
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| Other Tests for the Tax Effect | |
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| Conflict of Interest, Information, and Payout Policy | |
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| Conclusions | |
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| Common Stock Repurchases: An Alternative to Dividends | |
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| Motives for Common Stock Repurchases versus Dividend Payments | |
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| Similar Motives | |
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| Dissimilar Motives | |
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| Survey Results on Common Stock Repurchases | |
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| Methods of Common Stock Repurchases | |
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| Fixed-Price Tender Offers | |
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| Open-Market Repurchases | |
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| Dutch-Auction Repurchases | |
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| Transferable Put-Rights Distributions | |
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| Targeted Stock Repurchases | |
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| Trends in Common Stock Repurchases | |
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| Tax Issues in Share Repurchases versus Dividend Payments | |
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| Theoretical Implications of Share Repurchases | |
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| Signaling Models | |
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| Takeover Defenses | |
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| The Empirical Evidence on Share Repurchases | |
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| Announcement Period Returns | |
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| Share Repurchases as a Signaling Mechanism | |
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| Corporate Control Issues | |
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| Share Repurchase Interpretations | |
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| Conclusions | |
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| Management Implications and Conclusions | |
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| What Do Managers Think about Dividend Policy? | |
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| What Do We Think about Dividend Policy? | |
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| The "Balance Scale" of Dividend Relevance | |
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| The Competing Frictions Model | |
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| Individual Market Imperfections | |
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| Taxes | |
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| Agency Costs | |
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| Asymmetric Information | |
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| Transaction Costs | |
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| Flotation Costs | |
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| Behavioral Considerations | |
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| Interactions of Market Imperfections | |
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| Strategies in Dealing with Market Imperfections | |
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| An Example of Competing Frictions Resolution | |
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| A Dividend Life Cycle Example | |
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| Conclusions | |
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| References | |
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| Credits | |
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| Index | |