Cash Distributions to Shareholders

Bagwell, Laurie Simon; Shoven, John B.

doi:10.1257/jep.3.3.129

Cited by 265 publications

(122 citation statements)

References 16 publications

(12 reference statements)

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“…While there seems to be a historical trend from dividends to repurchases (Bagwell and Shoven [19], Fama and French [20], Grullon and Michaely [21]), (Allen and Michaely [7] p. 421) report that dividends and repurchases payouts when combined had remained fairly constant in the previous ten years. Lee and Suh [22] found that repurchases are often accompanied by increases in dividend payout.…”

Section: Dividends and Repurchases As Payout Optionsmentioning

confidence: 99%

A Note on Realistic Dividends in Actuarial Surplus Models

Avanzi

Wong

2016

Risks

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Abstract:Because of the profitable nature of risk businesses in the long term, de Finetti suggested that surplus models should allow for cash leakages, as otherwise the surplus would unrealistically grow (on average) to infinity. These leakages were interpreted as 'dividends'. Subsequent literature on actuarial surplus models with dividend distribution has mainly focussed on dividend strategies that either maximise the expected present value of dividends until ruin or lead to a probability of ruin that is less than one (see Albrecher and Thonhauser, Avanzi for reviews). An increasing number of papers are directly interested in modelling dividend policies that are consistent with actual practice in financial markets. In this short note, we review the corporate finance literature with the specific aim of fleshing out properties that dividend strategies should ideally satisfy, if one wants to model behaviour that is consistent with practice.

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Section: Dividends and Repurchases As Payout Optionsmentioning

confidence: 99%

A Note on Realistic Dividends in Actuarial Surplus Models

Avanzi

Wong

2016

Risks

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“…Within this context, the personal tax savings hypothesis, states that share repurchases can be more tax efficient and more beneficial to shareholders, compared to cash dividends (Grullon and Michaely 2002). While Bagwell and Shoven (1989) and Dittmar (2000) find no evidence of taxation having a significant impact on corporate payouts, a number of research studies do find evidence of tax having a significant influence on firms' decision making on payouts, and of the market having a favorable reaction due to the tax impact (Masulis 1980;Grullon and Michaely 2002). Furthermore, open market share repurchases can have advantages relative to cash dividends such as tax differential and that they do not pose a commitment to the firm.…”

Section: Datamentioning

confidence: 99%

Prediction of open market share repurchases and portfolio returns: evidence from France, Germany and the UK

Andriosopoulos

Gaganis

Pasiouras

2014

Rev Quant Finan Acc

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This study uses logistic regression for the development of prediction models that distinguish between share-repurchasing and non-share repurchasing firms. The estimated models form the basis for an investment strategy, according to which one invests on the stock of the firms that are predicted as repurchasing ones. Using a sample of firms from the UK, France, and Germany, the results show that this strategy generates positive and statistically significant abnormal returns over different investment periods that range between 1 and 18 months.

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“…Further, the papers analyzed the tax effects on payout policy are Black (1976), Miller (1977), Miller and Scholes (1978), Peterson et al (1985), Hubbard and Michaely (1997), Allen et al (2000), Christoffersen et al (2005), and Desai and Jin (2011). Moreover, the studies investigated the stock repurchases are Dann (1981), Bagwell and Shoven (1989), Skinner (2008), and von Eije and Megginson (2008). Furthermore, the literature analyzed the payout policy from the viewpoints of behavioral economics and behavioral finance are Shefrin and Statman (1984), Stein (1989Stein ( , 1996, Wurgler (2004a, 2004b), and Graham and Kumar (2006).…”

Section: Introductionmentioning

confidence: 99%

The Market Valuation Hypothesis of Dividend Policy: New Evidence from Japan

Tsuji¹

2013

RAE

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This paper explores the determinants of the dividend policy in Japan. First, our empirical investigations reveal that in contrast to the US case, the dividend premium is neither the determinant of the dividend initiations nor the continuations of the Japanese firms. Second, we newly find that the strong determinants of the Japanese firms' dividend initiations are the nonpayers' same year's and previous year's market-to-book ratios. In addition to the above, we also reveal that the strong determinants of the Japanese firms' dividend continuations are the payers' same year's and previous year's market-to-book ratios. These results clearly support our new hypothesis, the market valuation hypothesis of the dividend policy in Japan, and demonstrate our novel contributions of this study. Furthermore, our empirical results also indicate that the Japanese corporate managers can foresee their own firms' earnings for at most two years ahead. We consider that this evidence may not be consistent with the traditional signaling hypothesis of dividend policy.

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Cash Distributions to Shareholders

Cited by 265 publications

References 16 publications

A Note on Realistic Dividends in Actuarial Surplus Models

A Note on Realistic Dividends in Actuarial Surplus Models

Prediction of open market share repurchases and portfolio returns: evidence from France, Germany and the UK

The Market Valuation Hypothesis of Dividend Policy: New Evidence from Japan

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