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Do Senior Citizens Prefer Dividends? Local Clienteles vs. Firm Characteristics

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  • Krieger, Kevin
  • Lee, Bong-Soo
  • Mauck, Nathan

Abstract

We examine the payout policy of U.S. firms over the period 1980-2008. Prior research indicates that firm characteristics, managerial preferences, and investor clienteles are all important factors in setting payout policy. Counter to the oft-reported positive relation between senior citizens and the use of dividends, our results indicate that senior citizens are either indifferent between dividends and repurchases or demand dividends and have no influence over firm policy. The evolution of firm characteristics, including the average firm size, age, and volatility of earnings over time best explains payout policy. Further, manager preference for flexibility drives the payout decision. JEL

Suggested Citation

  • Krieger, Kevin & Lee, Bong-Soo & Mauck, Nathan, 2012. "Do Senior Citizens Prefer Dividends? Local Clienteles vs. Firm Characteristics," MPRA Paper 41784, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:41784
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    References listed on IDEAS

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    Cited by:

    1. John, Kose & Knyazeva, Anzhela & Knyazeva, Diana, 2015. "Governance and Payout Precommitment," Journal of Corporate Finance, Elsevier, vol. 33(C), pages 101-117.

    More about this item

    Keywords

    Payout Policy; Clientele Effect;

    JEL classification:

    • G35 - Financial Economics - - Corporate Finance and Governance - - - Payout Policy
    • G30 - Financial Economics - - Corporate Finance and Governance - - - General

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