Journal article
Dividend changes and catering incentives
Journal of financial economics, Vol.80(2), pp.293-308
05/01/2006
DOI: 10.1016/j.jfineco.2005.03.005
Abstract
We extend Baker and Wurgler's [2004a. Journal of Finance 59 1125–1165] catering theory to include decreases and increases in existing dividends. Consistent with our extended model, we find that the decision to change the dividend and the magnitude of the change depend on the premium that the capital market places on dividends. We also find that the stock market reaction to dividend changes depends on the dividend premium. Thus, the capital market rewards managers for considering investor demand for dividends when making decisions about the level of dividends.
Details
- Title: Subtitle
- Dividend changes and catering incentives
- Creators
- Wei Li - University of IowaErik Lie - University of Iowa
- Resource Type
- Journal article
- Publication Details
- Journal of financial economics, Vol.80(2), pp.293-308
- Publisher
- Elsevier B.V
- DOI
- 10.1016/j.jfineco.2005.03.005
- ISSN
- 0304-405X
- eISSN
- 1879-2774
- Language
- English
- Date published
- 05/01/2006
- Academic Unit
- Finance
- Record Identifier
- 9984380485402771
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