Dividend Policy, Growth, and the Valuation of Shares

Miller, Merton H.; Modigliani, Franco

doi:10.1086/294442

Cited by 4,686 publications

(3,001 citation statements)

References 13 publications

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“…Following testing with logistic and TOBIT regressions, the hypothesis could not be conclusively rejected. The dividend policies of Brazilian firms to some extent support Miller and Modigliani's (1961) proposition concerning the clientele effect and dividend decision. The impact of the latter is probably due to corporate governance issues and related to predominant mechanisms of financing in the Brazilian financial market.…”

mentioning

confidence: 79%

Dividendos e efeito clientela: evidências no mercado brasileiro

Holanda¹,

Coelho²

2012

Rev. adm. empres.

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We investigated whether characteristics other than corporate operation, a proxy for clientele effect, marginally differentiated the dividend policies of 401 firms (2339 firm/years) traded on BM&Fbovespa in the period 1998-2010. A statistically significant association between the decision to declare dividends (and amounts) and the clientele effect was hypothesized. Following testing with logistic and TOBIT regressions, the hypothesis could not be conclusively rejected. The dividend policies of Brazilian firms to some extent support Miller and Modigliani's (1961) proposition concerning the clientele effect and dividend decision. The impact of the latter is probably due to corporate governance issues and related to predominant mechanisms of financing in the Brazilian financial market. keywords Dividends, clientele effect, ownership structure, brazilian public companies, logistic regression.

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mentioning

confidence: 79%

Dividendos e efeito clientela: evidências no mercado brasileiro

Holanda¹,

Coelho²

2012

Rev. adm. empres.

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“…Some authors argue that dividends can convey information about future cash flows (Miller and Modigliani, 1961) and that managers may use dividend changes as costly signals of future earnings changes (Miller and Rock, 1985;Bhattacharya, 1979;John and Williams, 1985).…”

Section: Stock Returns Price Informativeness and Dividend Changesmentioning

confidence: 99%

Dividend Changes and Stock Price Informativeness

Cesari

Huang

2014

SSRN Journal

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We investigate how private information in stock prices impacts quarterly dividend changes. We find that the positive relationship between past returns and current dividend changes strengthens when returns convey more private information. This finding is robust to the use of several price informativeness measures and the inclusion of managerial private information and stock overvaluation measures. Managers seem to learn new information from stock prices that they use when deciding on their dividend policy. This study highlights private information in stock prices as an important determinant of dividend policy and contributes to the literature on the real effects of financial markets.

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“…It is straightforward from Eq. (5) to show that, when λ = 0 and τ d t+ j = τ g t+ j for all t and j, the Miller and Modigliani dividend policy irrelevance theorem holds (Miller and Modigliani, 1961). In particular, a firm's investment and payout policies are independent.…”

Section: Firmsmentioning

confidence: 99%

Transitional dynamics of dividend and capital gains tax cuts

Gourio

Miao

2011

Review of Economic Dynamics

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We develop a dynamic general equilibrium model to study the impact of the 2003 dividend and capital gains tax cuts. In the model, firms are heterogeneous in productivity and make investment and financing decisions subject to capital adjustment costs, equity issuance costs, and collateral constraints. We show that when the dividend and capital gains tax cuts are unexpected and permanent, dividend payments, equity issuance, and aggregate investment rise immediately. By contrast, when these tax cuts are unexpected and temporary, aggregate investment falls in the short run. This fall allows firms to distribute large dividends initially in response to the temporary dividend tax cut. We also find that the effects of a temporary dividend tax cut are very different from those of a temporary capital gains tax cut.

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Dividend Policy, Growth, and the Valuation of Shares

Cited by 4,686 publications

References 13 publications

Dividendos e efeito clientela: evidências no mercado brasileiro

Dividendos e efeito clientela: evidências no mercado brasileiro

Dividend Changes and Stock Price Informativeness

Transitional dynamics of dividend and capital gains tax cuts

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