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.
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- Ofer, Aharon R & Thakor, Anjan V, 1987.
" A Theory of Stock Price Responses to Alternative Corporate Cash Disbursement Methods: Stock Repurchases and Dividends,"
Journal of Finance,
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Cowles Foundation Discussion Papers
878, Cowles Foundation for Research in Economics, Yale University.
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