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Shareholder Preferences and Dividend Policy

Author

Listed:
  • Michael J. Brennan

    (University of California, Los Angeles)

  • Anjan V. Thakor

    (Olin School of Business, Washington University)

Abstract

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.

Suggested Citation

  • Michael J. Brennan & Anjan V. Thakor, 2004. "Shareholder Preferences and Dividend Policy," Finance 0411017, University Library of Munich, Germany.
    • Handle: RePEc:wpa:wuwpfi:0411017
    Note: Type of Document - pdf; pages: 27
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    References listed on IDEAS

    as
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    JEL classification:

    • G - Financial Economics

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