Dividend Policy

Description

Dividend Policy provides a comprehensive study of dividend policy. It explores the puzzle presented by dividends: irrational and subject to fashion, yet popular and desirable, they remain a priority among managers, even while perceived as largely symbolic.

After exploring the history of dividend payments, from the emergence of the modern corporation to current perspectives, it traces the evolution of academic models on dividend policy. Here the authors review models of symmetric and asymmetric information before analyzing academia's accomplishments in solving the dividend puzzle. Related subjects, such as valuation and wealth distribution, round out the authors' presentation about new ways to think about one of the most intriguing subjects in financial economics.

The book is recommended for professors and students in departments of finance and business, corporate finance staff, and financial regulators.

The only comprehensive study of dividend policy
Covers the historical evolution of dividends and academic research on dividend policy
Presents new ways of thinking about dividends and dividend policy

Front Cover 2
DIVIDEND POLICY THEORY AND PRACTICE 5
Copyright Page 6
Contents 7
Preface 13
Part I: The Historical Evolution of Dividends 15
- Chapter 1. Introduction 17
  - References 23
- Chapter 2. The Evolution of the Modern Corporation in the Netherlands and the United Kingdom 25
  - 2.1 Early Joint Stock Companies: Origins to 1720 25
  - 2.2 Revival of the Joint Stock Companies, 1800–1900 32
  - References 34
- Chapter 3. The Evolution of the Modern Corporation in the United States of America 35
  - 3.1 From the Revolution to the End of the 18th Century 35
  - 3.2 The 19th Century 38

Front Cover 2
DIVIDEND POLICY THEORY AND PRACTICE 5
Copyright Page 6
Contents 7
Preface 13
Part I: The Historical Evolution of Dividends 15
- Chapter 1. Introduction 17
  - References 23
- Chapter 2. The Evolution of the Modern Corporation in the Netherlands and the United Kingdom 25
  - 2.1 Early Joint Stock Companies: Origins to 1720 25
  - 2.2 Revival of the Joint Stock Companies, 1800–1900 32
  - References 34
- Chapter 3. The Evolution of the Modern Corporation in the United States of America 35
  - 3.1 From the Revolution to the End of the 18th Century 35
  - 3.2 The 19th Century 38
  - 3.3 The Early 20th Century 43
  - 3.4 The Origins of No-par Stock Issues 43
  - 3.5 The Boom and the Bust 45
  - 3.6 Post-World War II 48
  - References 51
- Chapter 4. 200 Years of Dividend Practices 55
  - 4.1 Introduction 55
  - 4.2 Dividend Patterns 58
  - 4.3 Dividend Reinvestment Plans (DRIPs) 59
  - References 61
  - 4.4 Conclusion 61
- Chapter 5. Dividend Reinvestment Plans: A Puzzle within the Puzzle 63
  - 5.1 Introduction 63
  - 5.2 DRIPs Literature 67
  - 5.3 DRIP Characteristics 69
  - References 75
  - 5.4 Conclusions 75
- Chapter 6. Preferred Stock and Dividends: A Revealing Divergence 77
  - 6.1 The Origins of Preferred Stock 78
  - 6.2 The Maturation and Specialization of Preferred Stock 80
  - References 82
- Part II: The Evolution of Academic Research on Dividend Policy 83
  - Chapter 7. Early Academic Thinking and Research 85
    - References 91
  - Chapter 8. Models of Symmetric Information and Empirical Research 95
    - 8.1 Theoretical Models 95
    - 8.2 Empirical Investigation of the Tax Effect on Dividends 97
    - References 101
  - Chapter 9. Models of Asymmetric Information and Empirical Research 105
    - 9.1 Signaling and “The Information Content of Dividend” Hypothesis 105
    - 9.2 Formal Signaling Models and Their Empirical Tests 106
    - 9.3 Empirical Tests of the Informational Content of the Dividend Hypothesis 111
    - 9.4 Agency Cost Theory 114
    - 9.5 The Free Cash Flow Hypothesis 115
    - References 117
  - Chapter 10. Determinants of Dividend Policies 121
    - 10.1 Method of Analysis 122
    - 10.2 Empirical Results 126
    - 10.3 Summary and Conclusions 146
    - References 147
    - Appendix A 149
    - Appendix B: The Relationship Between DIV and FCASH 152
  - Part III: What Academic Research Proves and What It Does Not Prove 155
    - Chapter 11. The “Balance Sheet” of Academic Research: What It Does/Does Not Prove 157
      - 11.1 Method of Analysis 158
      - 11.2 Data 160
      - 11.3 Results 161
      - 11.4 Conclusions 167
      - References 169
      - Appendix A: Method of Analysis Abbreviations 177
    - Part IV: New Ways of Thinking About Dividends and Dividend Policy 179
      - Chapter 12. Unconventional Explanations 181
        
        12.1 Managerial Surveys 182
        
        12.2 Theoretical Behavioral Models 183
        
        References 185
      - Chapter 13. Dividend Policy of Regulated Industries 187
        
        13.1 Dividend Policy and Corporate Monitoring 189
        
        13.3 Summary 197
        
        13.2 Real Estate Investment Trusts 197
        
        References 199
      - Chapter 14. What if We Do Not Pay Dividends? 201
        
        References 205
      - Chapter 15. Other Methods of Distribution 207
        
        15.1 Stock Dividends and Stock Splits 207
        
        15.2 Stock Repurchase 220
        
        References 234
        
        15.3 Greenmail 234
        
        Appendix A: Stock Dividend Survery 238
      - Chapter 16. Conclusions: Future Research and Thinking 243
        
        References 246
      - Index 247

Author's affiliation

George Frankfurter: Emeritus, Louisiana State University, Baton R
Bob G. Wood: Tennessee Technological University, Cookevill
James Wansley: University of Tennessee, Knoxville, U.S.A

Theory and Practice

Description

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Author's affiliation