Shareholder Preferences and Dividend Policy

MICHAEL J. BRENNAN; ANJAN V. THAKOR

doi:10.1111/j.1540-6261.1990.tb02424.x

Shareholder Preferences and Dividend Policy

MICHAEL J. BRENNAN
, ANJAN V. THAKOR

Research output: Contribution to journal › Article › peer-review

187 Scopus citations

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. 1990 The American Finance Association

Original language	English
Pages (from-to)	993-1018
Number of pages	26
Journal	The Journal of Finance
Volume	45
Issue number	4
DOIs	https://doi.org/10.1111/j.1540-6261.1990.tb02424.x
State	Published - Sep 1990

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10.1111/j.1540-6261.1990.tb02424.x

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title = "Shareholder Preferences and Dividend Policy",

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AB - 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. 1990 The American Finance Association

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Shareholder Preferences and Dividend Policy

Abstract

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