Dividend Policy

Theory and Practice


  • George Frankfurter, Emeritus, Louisiana State University, Baton Rouge
  • Bob Wood, Tennessee Technological University, Cookeville, U.S.A
  • James Wansley, University of Tennessee, Knoxville, U.S.A

Dividend Policy explores the puzzle presented by dividends: irrational and subject to fashion, yet popular and desirable, they remain a priority among managers, even while perceived as largely symbolic. After exploring the history of dividend payments, from the emergence of the modern corporation to current perspectives, it traces the evolution of academic models on dividend policy. Here the authors review models of symmetric and asymmetric information before analyzing academia's accomplishments in solving the dividend puzzle. Related subjects, such as valuation and wealth distribution, round out the authors' presentation about new ways to think about one of the most intriguing subjects in financial economics.
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Professors and students in departments of finance and business; corporate finance staff; financial regulators.


Book information

  • Published: March 2003
  • ISBN: 978-0-12-266051-1


"Frankfurter and Wood challenge establishment theory on dividend policy with an eclectic and sophisticated survey of current practice that also makes reading academic finance enjoyable." --Myron J. Gordon, Professor of Finance, University of Toronto, Canada "A valuable and complete guide to all you need to know about dividends." --Donald J. Mullineaux, Director, School of Management, duPont Chair in Banking and Financial Services, University of Kentucky, Lexington, USA "Celebrating Ken Arrow's Nobel Prize, Paul Samuelson commented that the theory of democracy can never be the same since Arrow. After the publication of George Frankfurter and Bob Wood's breath-taking [book] financial economics cannot be the same as before." Manfred J. Holler, University of Hamburg, Germany

Table of Contents

I. The Historical Evolution of Dividends: The Evolution of the Stock Market and the Modern Corporation in the Netherlands and the United Kingdom; The Evolution of the Stock Market and the Modern Corporation in the USA; 200 Years of Dividend Practices; Dividend Reinvestment Plans;Preferred Stock and Dividends; II. The Evolution of Academic Research on Dividend Policy: Early Academic Thinking and Research; Models of Symmetric Information and Empirical Research; Models of Asymmetric Information and Empirical Research; Determinants of Dividend Policies; III. What Academic Research Proves and What It Does Not Prove;IV. New Ways of Thinking About Dividends and Dividend Policy: Unconventional Explanations; Regulated Industries; What If We Do Not Pay Dividends?Other Methods of Distribution; Future Research and Thinking