Download or read book Managerial Entrenchment and the Value of Dividends written by Woo-Jong Lee and published by . This book was released on 2014 with total page 41 pages. Available in PDF, EPUB and Kindle. Book excerpt: This study examines the effects of takeover defenses on the value implication of dividends. Using the framework of Fama and French (1998), the paper shows that dividends paid by managers with strong managerial power resulting from takeover protection measures are more valued in the stock market. The results are consistent with the hypothesis of the agency costs of free cash flow built on by Jensen (1986) in the sense that dividends are important to determine firm value by reducing the free cash flow that would otherwise be deployed for private benefits by entrenched managers. This paper also examines whether the incremental value effect of dividends in entrenched firms is attributable to a numerator effect (changes in the future cash flow) or a denominator effect (changes in the discount rate). The empirical results show that the dividend payout of such firms is more positively related to future performance and more negatively related to information risk, which supports both numerator and denominator effects.

Download or read book Corporate Dividend Policy and Managerial Entrenchment written by Aidong Hu and published by . This book was released on 2002 with total page 218 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Dividend Policy Corporate Governance and Managerial Entrenchment written by Jorge Bento Ribeiro Barbosa Farinha and published by . This book was released on 1999 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Managerial Share Ownership Firm Performance and Dividends written by and published by . This book was released on 2009 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: This thesis examines the relationship between managerial share ownership and firm performance as well as the relationship between managerial share ownership and dividends in Australia. Agency theory, more specifically two alternative theories - incentive alignment and managerial entrenchment theory - provides the theoretical framework that underpins this thesis. The three empirical studies in this thesis examine the top 300 Australian listed companies for the period 2000 to 2006 and the methodology is based on multivariate regression analysis. Most importantly, all of the studies consider the potential endogeneity of managerial share ownership as well as the simultaneity between managerial share ownership and performance, and managerial share ownership and dividends. There are several primary motivations for this thesis. First, it is argued that characteristics of the Australian legal system, ownership characteristics, market for corporate control, and other corporate governance features, mean that the Australian corporate governance system is markedly different from that of the US and the UK; these differences have the potential to impact the ownership-performance and ownership-dividends relationships examined. Second, much of the prior literature examines the relationship between managerial share ownership and performance using share ownership by all the directors, and does not distinguish between share ownership by the executive directors and by the non-executive directors, in particular, the independent directors. It is posited that executive directors and independent directors have different ownership-performance and ownership-dividends incentives and these are examined separately. Third, the Australian dividend imputation system has interesting implications for the ownership-dividends relationship this thesis examines. The first empirical study in this thesis investigates the relationship between managerial share ownership and performance measured by Tobin's Q.

Download or read book Managerial Share Ownership Firm Performance and Dividends written by Arifur Khan and published by . This book was released on 2009 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: This thesis examines the relationship between managerial share ownership and firm performance as well as the relationship between managerial share ownership and dividends in Australia. Agency theory, more specifically two alternative theories - incentive alignment and managerial entrenchment theory - provides the theoretical framework that underpins this thesis. The three empirical studies in this thesis examine the top 300 Australian listed companies for the period 2000 to 2006 and the methodology is based on multivariate regression analysis. Most importantly, all of the studies consider the potential endogeneity of managerial share ownership as well as the simultaneity between managerial share ownership and performance, and managerial share ownership and dividends. There are several primary motivations for this thesis. First, it is argued that characteristics of the Australian legal system, ownership characteristics, market for corporate control, and other corporate governance features, mean that the Australian corporate governance system is markedly different from that of the US and the UK; these differences have the potential to impact the ownership-performance and ownership-dividends relationships examined. Second, much of the prior literature examines the relationship between managerial share ownership and performance using share ownership by all the directors, and does not distinguish between share ownership by the executive directors and by the non-executive directors, in particular, the independent directors. It is posited that executive directors and independent directors have different ownership-performance and ownership-dividends incentives and these are examined separately. Third, the Australian dividend imputation system has interesting implications for the ownership-dividends relationship this thesis examines. The first empirical study in this thesis investigates the relationship between managerial share ownership and performance measured by Tobin's Q and earnings. This study finds a negative relationship followed by a positive relationship (U-shaped) between managerial share ownership and performance. It is also documented that the relationship is bidirectional, that is, performance also affects managerial ownership but only when it uses Tobin's Q to measure performance. The study also documents a similar relationship for the executive directors' share ownership as for managerial share ownership as a whole. As posited, it does not find any relationship between share ownership by the independent directors and performance. The second empirical study examines the relationship between managerial share ownership and discretionary accruals, as well as accrual adjusted earnings. The study finds a positive relationship followed by a negative relationship (inverse U-shaped) between managerial share ownership and the absolute value of discretionary accruals. It also finds that this relationship is driven by executive as opposed to independent directors' share ownership. It then re-examines the relationship between managerial share ownership and performance measured by earnings adjusted for accruals. Once again a U-shaped relationship is documented between managerial share ownership and adjusted earnings. It is also documented that the relationship is bidirectional. The analysis for the executive directors reveals a similar relationship to that of managerial share ownership as a whole. Once again, no relationship is found between ownership by the independent directors and adjusted earnings. The third and final empirical study investigates the relationship between managerial share ownership and the likelihood of paying dividends as well as dividend payouts. It is found in this study that firms are more likely to pay dividends when managerial share ownership, as well as ownership by the executive directors, is high. Related to this is a positive relationship documented between managerial share ownership and dividend payouts as well as executive directors' share ownership and dividend payouts. However, this study fails to find any significant relationship between ownership by the independent directors and dividends. Since the direction of causality may also be an issue, this study also investigates the simultaneous determination of managerial ownership and dividend payouts. It fails to find any simultaneous relationship between ownership by managers and dividend payouts. The thesis as a whole presents some unique and robust results relating to the ownership-performance and ownership-dividends relationships, which are argued to be a result of certain Australian institutional features that are clearly different to those in the US and the UK. The results also support the argument that executive directors and independent directors have different ownership-performance and ownership-dividends incentives, and suggest that independent directors may be immune to the theorised incentive alignment or entrenchment effects associated with share ownership.

Download or read book Dividend Policy and Corporate Governance written by Luis Correia da Silva and published by OUP Oxford. This book was released on 2004-02-26 with total page 204 pages. Available in PDF, EPUB and Kindle. Book excerpt: Dividends are not only a signal about a firm's prospects under asymmetric information, but they can also act as a corporate governance device to align the management's interests with those of the shareholders. Dividend Policy and Corporate Governance is the first comprehensive volume on the relationship between dividend policy and corporate governance, and examines in detail empirical studies and current theories. Reviewing the interactions between dividend policy and other corporate governance mechanisms, it compares results for the UK and the US with those for other countries such as France, Germany, and Japan, and provides new empirical evidence on corporate governance in continental Europe and its impact on dividends. Focusing on one of the main representatives of this system, Germany, it highlights major differences between the dividend policies of German firms and those of UK or US firms. Conventional wisdom states that German dividends are lower than UK or US dividends, yet on a published-profits basis the exact converse is true. In addition, the authors demonstrate a link between corporate control structures and dividend payouts, report evidence that the existence of a loss is an additional determinant of dividend changes, and demonstrate that the tax status of the controlling shareholder and the firm's dividend payout are not linked. The conclusions reached in this book have important implications for the current debate on corporate governance, making it invaluable for academics, finance professionals, regulators, and legal advisors.

Download or read book Two Essays in Corporate Finance written by Carrie H. Pan and published by . This book was released on 2007 with total page 144 pages. Available in PDF, EPUB and Kindle. Book excerpt: Abstract: This dissertation examines two issues that are related to corporate payout policy. The first essay investigates the impact of financial development on dividend policy across countries, an issue that has largely been overlooked by the literature. The second essay investigates the relation between managerial entrenchment and firms' propensity to pay dividends in the U.S. Financial development has a positive influence on dividend policy because it improves a firm's access to external finance and it helps control the agency conflicts between corporate insiders and outside shareholders. Such influence reduces the firm's incentive to retain profits. Therefore, financial development should encourage higher dividend payouts and earlier dividend initiations. The first dissertation essay, presented in Chapter 2, tests this hypothesis. I find it to be true using a large sample of industrial firms across 44 countries. The results are robust to various measures of financial development. Moreover, I show that this effect is not driven by the difference in legal protection of minority shareholders across countries. In the second essay, presented in Chapter 3, I find that firms with entrenched managers, as measured by strong managerial power resulting from takeover protections, are more likely to pay dividends. Their high propensity to pay persists over time. While these results are surprising in light of the conventional wisdom, they support the view that firms choose a combination of governance provisions and dividend policy to maximize value. A large cash reserve can be used to deter hostile takeovers. Paying dividends reduces cash holdings, leaving the firm more vulnerable to hostile takeovers. In equilibrium, value-maximizing firms with weak investment opportunities protect managers against takeovers to induce them to distribute cash rather than build a warchest of cash against unwanted takeovers.

Download or read book Corporate Payout Policy written by Harry DeAngelo and published by Now Publishers Inc. This book was released on 2009 with total page 215 pages. Available in PDF, EPUB and Kindle. Book excerpt: Corporate Payout Policy synthesizes the academic research on payout policy and explains "how much, when, and how". That is (i) the overall value of payouts over the life of the enterprise, (ii) the time profile of a firm's payouts across periods, and (iii) the form of those payouts. The authors conclude that today's theory does a good job of explaining the general features of corporate payout policies, but some important gaps remain. So while our emphasis is to clarify "what we know" about payout policy, the authors also identify a number of interesting unresolved questions for future research. Corporate Payout Policy discusses potential influences on corporate payout policy including managerial use of payouts to signal future earnings to outside investors, individuals' behavioral biases that lead to sentiment-based demands for distributions, the desire of large block stockholders to maintain corporate control, and personal tax incentives to defer payouts. The authors highlight four important "carry-away" points: the literature's focus on whether repurchases will (or should) drive out dividends is misplaced because it implicitly assumes that a single payout vehicle is optimal; extant empirical evidence is strongly incompatible with the notion that the primary purpose of dividends is to signal managers' views of future earnings to outside investors; over-confidence on the part of managers is potentially a first-order determinant of payout policy because it induces them to over-retain resources to invest in dubious projects and so behavioral biases may, in fact, turn out to be more important than agency costs in explaining why investors pressure firms to accelerate payouts; the influence of controlling stockholders on payout policy --- particularly in non-U.S. firms, where controlling stockholders are common --- is a promising area for future research. Corporate Payout Policy is required reading for both researchers and practitioners interested in understanding this central topic in corporate finance and governance.

Download or read book Dividends and Dividend Policy written by H. Kent Baker and published by John Wiley & Sons. This book was released on 2009-04-27 with total page 832 pages. Available in PDF, EPUB and Kindle. Book excerpt: Dividends And Dividend Policy As part of the Robert W. Kolb Series in Finance, Dividends and Dividend Policy aims to be the essential guide to dividends and their impact on shareholder value. Issues concerning dividends and dividend policy have always posed challenges to both academics and professionals. While all the pieces to the dividend puzzle may not be in place yet, the information found here can help you gain a firm understanding of this dynamic discipline. Comprising twenty-eight chapters—contributed by both top academics and financial experts in the field—this well-rounded resource discusses everything from corporate dividend decisions to the role behavioral finance plays in dividend policy. Along the way, you'll gain valuable insights into the history, trends, and determinants of dividends and dividend policy, and discover the different approaches firms are taking when it comes to dividends. Whether you're a seasoned financial professional or just beginning your journey in the world of finance, having a firm understanding of the issues surrounding dividends and dividend policy is now more important than ever. With this book as your guide, you'll be prepared to make the most informed dividend-related decisions possible—even in the most challenging economic conditions. The Robert W. Kolb Series in Finance is an unparalleled source of information dedicated to the most important issues in modern finance. Each book focuses on a specific topic in the field of finance and contains contributed chapters from both respected academics and experienced financial professionals.

Download or read book How Do Managerial Entrenchment and Expropriation Affect Control Mechanisms written by Alberto de Miguel and published by . This book was released on 2009 with total page 30 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper proposes a new empirical approach that allows us to appropriately control for the non-linearities of ownership with respect to firm value when analysing how managerial entrenchment and expropriation affect the relations among control mechanisms. Unlike findings in previous US-based studies, which in general point to substitutability among mechanisms, our results show that control mechanisms (especially insider ownership, debt and dividends) are used in a complementary way by Spanish firms. In addition, this complementarity is only observed when the interests of managers and owners converge, but not when there are controlling owners - insiders or outsiders - whose interests need not coincide with those of minority shareholders. Therefore, managerial entrenchment and expropriation effects do influence the relationship among agency-cost control mechanisms.

Download or read book Complex Systems Multi Sided Incentives and Risk Perception in Companies written by Michael I.C. Nwogugu and published by Springer Nature. This book was released on 2019-09-06 with total page 849 pages. Available in PDF, EPUB and Kindle. Book excerpt: Most research about financial stability and sustainable growth focuses on the financial sector and macroeconomics and neglects the real sector, microeconomics and psychology issues. Real-sector and financial-sectors linkages are increasing and are a foundation of economic/social/environmental/urban sustainability, given financial crises, noise, internet, “transition economics”, disintermediation, demographics and inequality around the world. Within complex systems theory framework, this book analyses some multi-sided mechanisms and risk-perception that can have symbiotic relationships with financial stability, systemic risk and/or sustainable growth. Within the context of Regret Minimization, MN-Transferable Utility and WTAL, new theories-of-the-firm are developed that consider sustainable growth, price stability, globalization, financial stability and birth-to-death evolutions of firms. This book introduces new behaviour theories pertaining to real estate and intangibles, which can affect the evolutions of risk-taking and risk perception within organizations and investment entities. The chapters address elements of the dilemma of often divergent risk perceptions of, and risk-taking by corporate executives, regulators and investment managers.

Download or read book Advances in Quantitative Analysis of Finance and Accounting New Series Vol 14 written by Cheng F. Lee and published by Center for PBBEFR & Airiti Press. This book was released on 2016-01-01 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: Advances in Quantitative Analysis of Finance and Accounting (New Series) is an annual publication designed to disseminate developments in the quantitative analysis of finance and accounting. The publication is a forum for statistical and quantitative analyses of issues in finance and accounting as well as applications of quantitative methods to problems in financial management, financial accounting, and business management. The objective is to promote interaction between academic research in finance and accounting and applied research in the financial community and the accounting profession.

Download or read book Advances in Quantitative Analysis of Finance and Accounting New Series 2012 Vol 10 written by Cheng F. Lee and published by Center for PBBEFR & Airiti Press. This book was released on 2012-12-01 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: Advances in Quantitative Analysis of Finance and Accounting (New Series) is an annual publication designed to disseminate developments in the quantitative analysis of finance and accounting. The publication is a forum for statistical and quantitative analyses of issues in finance and accounting as well as applications of quantitative methods to problems in financial management, financial accounting, and business management. The objective is to promote interaction between academic research in finance and accounting and applied research in the financial community and the accounting profession.

Download or read book Finance written by Nico van der Wijst and published by Cambridge University Press. This book was released on 2013-01-17 with total page 449 pages. Available in PDF, EPUB and Kindle. Book excerpt: An introduction to modern finance designed for students with strong quantitative skills.

Download or read book Financial Management Practices written by P.K. Jain and published by Springer Science & Business Media. This book was released on 2013-03-26 with total page 426 pages. Available in PDF, EPUB and Kindle. Book excerpt: Financial management practices are likely to have a marked effect on the financial performance of a corporate enterprise. Therefore, sound financial decisions/practices can contribute towards meeting the desired objective of having profitable operations. This subject assumes paramount significance in view of the present dynamic and turbulent business environment, which has produced more intense competition and smaller profit margins across the world. In this context, the financial management practices of the corporates in India, a country with a vast potential for economic growth, can offer valuable insights. The present study explores whether there has been a major change in the financial performance (measured in terms of profitability) and financial policies/decisions of the sample companies over a fixed period (2000-2001 to 2010-2011), with a special focus on pre and post-recession analysis. It delves deeper into current research areas such as zero working capital, real options in capital budgeting, pecking order in capital structures, and clause 49 as reflected in the financial management decisions of sample companies, and provides a broader perspective by identifying trends (if any) in certain aspects of financial decision-making over the past two decades. A comprehensive study, covering all the major aspects of financial management practices, also contains an inter-sectoral study (among the sample companies) and develops an index of professionalism in financial management based on the practices of the sample companies. The book is primarily targeted at teachers/students of finance, management, commerce, accounting and related professional disciplines/fields. Practitioners/professionals will find it an invaluable text that helps guide them to better decision-making.

Download or read book Finance written by Nico van der Wijst and published by Cambridge University Press. This book was released on 2013-01-17 with total page 449 pages. Available in PDF, EPUB and Kindle. Book excerpt: By providing a solid theoretical basis, this book introduces modern finance to readers, including students in science and technology, who already have a good foundation in quantitative skills. It combines the classical, decision-oriented approach and the traditional organization of corporate finance books with a quantitative approach that is particularly well suited to students with backgrounds in engineering and the natural sciences. This combination makes finance much more transparent and accessible than the definition-theorem-proof pattern that is common in mathematics and financial economics. The book's main emphasis is on investments in real assets and the real options attached to them, but it also includes extensive discussion of topics such as portfolio theory, market efficiency, capital structure and derivatives pricing. Finance equips readers as future managers with the financial literacy necessary either to evaluate investment projects themselves or to engage critically with the analysis of financial managers. Supplementary material is available at www.cambridge.org/wijst.

Download or read book Inequality Class and Economics written by Eric Schutz and published by NYU Press. This book was released on 2022-01-24 with total page 160 pages. Available in PDF, EPUB and Kindle. Book excerpt: What if neoclassical economics addressed the question of class? This accessible overview of economic theory launches this investigation The COVID-19 pandemic exposed the economic inequalities pervading every aspect of society— and then multiplied them to a staggering degree. A mere nine months into the lockdown, the net worth of the infamous Forbes 400 increased by one trillion dollars; In a single year the US poverty rate rose by the largest amount ever since record-keeping began sixty years ago. At the same time, mass unemployment imperiled or erased the fragile right to quality health care for a substantial number of people living in states without Medicaid. In Inequality, Class, and Economics, Eric Schutz illumines the pillars undergirding the monstrous polarities which define our times— and reveals them as the very same structures of power at the foundations of the class system under today's capitalism. Employing both traditional and novel approaches to public policy, Inequality, Class, and Economics offers prescriptions that can genuinely address the steepening and hardening of class boundaries. This book pushes past economists' studied avoidance of the problem of class as a system of inequality based in unequal opportunity, and exhorts us to tackle the heart of the problem at long last.