Skip to content

Dividend Policy Its Impact on Firm Value

Spend $50 to get a free movie!

ISBN-10: 0875844979

ISBN-13: 9780875844978

Edition: 1999

Authors: Ronald C. Lease, Kose John, Avner Kalay, Uri Loewenstein, Oded H. Sarig

List price: $62.00
Blue ribbon 30 day, 100% satisfaction guarantee!
Out of stock
what's this?
Rush Rewards U
Members Receive:
Carrot Coin icon
XP icon
You have reached 400 XP and carrot coins. That is the daily max!

This authoritative guide--the only in-depth survey of dividend policy--challenges the belief that corporate executives and financial analysts should dismiss dividend policy as irrelevant to shareholder wealth. Dividend policy does matter, say the authors, as they cite many classic and contemporary examples to show how dividend policy decisions play out in the marketplace. A carefully planned and executed policy is critical to maximizing shareholder wealth. This accessible, practical book covers every aspect of sound dividend planning and implementation. It includes a brief history of the evolution of dividends, statistics on dividends relative to profits and capital investments, their…    
Customers also bought

Book details

List price: $62.00
Copyright year: 1999
Publisher: Oxford University Press, Incorporated
Publication date: 11/15/1999
Binding: Hardcover
Pages: 219
Size: 6.50" wide x 9.50" long x 0.75" tall
Weight: 1.122
Language: English

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