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Dec 1, 2022 · There are two conflicting hypotheses on the effect of stock liquidity on dividend policy. The first hypothesis (the liquidity cost hypothesis) derived by Banerjee et al. (2007) from Miller and Modigliani (1961) dividend irrelevance theory assumes a negative association between stock liquidity and dividend policy.
- Does stock market liquidity affect dividends?☆ - ScienceDirect
Abstract. Using two exogenous shocks, we examine the causal...
- Corporate liquidity and dividend policy under uncertainty
Abstract. We examine optimal liquidity (retained earnings)...
- Does stock market liquidity affect dividends?☆ - ScienceDirect
Jan 4, 2022 · However, in the context of emerging markets, this topic is still under-explored even though firms in emerging markets are of lower disclosure quality. This paper investigates how corporate dividend decision is associated with liquidity, a measure of information asymmetries using a data sample of listed firms in Vietnam, an emerging market.
Sep 1, 2022 · Abstract. Using two exogenous shocks, we examine the causal impact of stock liquidity on firms' dividend policy. Both the first shock, the reduction of the minimum tick size from 1/16 to decimals in the US, and the second shock, the mandatory conversion of non-traded stocks to traded stocks in China, changed the liquidity of affected stocks.
Feb 1, 2017 · Abstract. We examine optimal liquidity (retained earnings) and dividend choice incorporating debt financing with risk of default and bankruptcy costs as well as growth options under revenue uncertainty. We revisit the conditions for dividend policy irrelevancy and the broader role of retained earnings and dividends.
- Nicos Koussis, Spiros H. Martzoukos, Lenos Trigeorgis
- 2017
Nov 18, 2022 · The effect of dividend payout decisions on CEC is also in line with Redding and Amihud , who find that dividend payouts have a negative effect on stock returns, indicating that investors often prefer receiving dividends. The magnitude of the CEC reduction via the liquidity risk channel appears to be reasonable given the findings of prior literature.
Further, dividend helps investors to avoid trading cost when liquidity is low (Banerjee et al., 2007). This argument is also supported by Dong et al. (2005), which assert that retail investors partly want dividends due to the lower cost of cash dividends compared to the transaction cost when selling stock.
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In order to examine the possible relationship between corporate liquidity and dividend policy, public European firms are examined. Denmark, France, Germany, Norway, Sweden, and the UK are selected based on the similarities in the regulation and market structure in the countries. The thesis aims at furthering the knowledge on the role played by ...
