Shareholder Preferences and Dividend Policy
This paper develops a theory of choice among alternative procedures for distributing cash from corporations to shareholders. Despite the preferential tax treatment of capital gains for individual investors, it is shown that a majority of a firm's shareholders may support a dividend payment for small distributions. For larger distributions, an open-market stock repurchase is likely to be preferred by a majority of shareholders and, for the largest distributions, tender offer repurchases dominate. Copyright 1990 by American Finance Association.
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Volume (Year): 45 (1990)
Issue (Month): 4 (September)
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