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An Empirical Examination of the Price-Dividend Relation with Dividend Management

  • Lucy Ackert
  • William Hunter

Some recent empirical evidence suggests that stock prices are not properly modelled as the present discounted value of expected dividends. In this paper we estimate a present value model of stock price that is capable of explaining the observed long-term trends in stock prices. The model recognizes that firm managers control cash dividend payments. The model estimates indicate that stock price movements may be explained by managerial behavior.

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File URL: http://hdl.handle.net/10.1023/A:1011190800890
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Article provided by Springer & Western Finance Association in its journal Journal of Financial Services Research.

Volume (Year): 19 (2001)
Issue (Month): 2 (April)
Pages: 115-129

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Handle: RePEc:kap:jfsres:v:19:y:2001:i:2:p:115-129
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