Current Search: Dividends -- Econometric models (x)
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Title
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Governance and earnings management surrounding dividend initiation.
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Creator
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Smith, Deborah Drummond., College of Business, Department of Finance
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Abstract/Description
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Essay I: Governance surrounding dividend initiation. According to the free cash flow hypothesis, managers prefer to invest surplus cash, even in value reducing projects, rather than release it to shareholders. Yet, previous studies of dividend payout conclude that managers pay more in dividends when they are entrenched, supporting the substitute model... The results indicate that initiating firms have stronger shareholder rights, in contrast with much of the prior research on continuous...
Show moreEssay I: Governance surrounding dividend initiation. According to the free cash flow hypothesis, managers prefer to invest surplus cash, even in value reducing projects, rather than release it to shareholders. Yet, previous studies of dividend payout conclude that managers pay more in dividends when they are entrenched, supporting the substitute model... The results indicate that initiating firms have stronger shareholder rights, in contrast with much of the prior research on continuous divident payout. Firms with lower entrenchment index are more likely to initiate dividends... Essay II: Earnings management surrounding dividend initiation. Prior research tests earnings management surrounding changes in dividend payout and researchers conclude that the earnings management is a means of amplifying the dividend signal to the market. However, dividend initiation is a unique event. If initiation represents signaling, similar to a dividend increase, then management will manage earnings upward. If, on the other hand, divident initiation is better explained by the free cash flow hypothesis, then initiation may be entered into with caution or reluctance by management.
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Date Issued
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2012
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PURL
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http://purl.flvc.org/fcla/dt/3362041
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Subject Headings
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Investment analysis, Portfolio management, Dividends, Econometric models
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Format
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Document (PDF)
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Title
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The effect of shareholder rights and information asymmetry on option-related repurchase activity.
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Creator
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Golden, Nan, Kohlbeck, Mark, Florida Atlantic University, College of Business, School of Accounting
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Abstract/Description
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I investigate the effect of shareholder rights and information asymmetry on option-related repurchase activity. Prior research shows that the dilution effect of the exercise of the employee stock options on earnings per share (EPS) decreases the value of stock options. Thus, managers tend to use stock repurchases rather than dividends to return cash to shareholders (the dividend substitution effect). I document that the executive stock option incentives to repurchase stock as a substitute for...
Show moreI investigate the effect of shareholder rights and information asymmetry on option-related repurchase activity. Prior research shows that the dilution effect of the exercise of the employee stock options on earnings per share (EPS) decreases the value of stock options. Thus, managers tend to use stock repurchases rather than dividends to return cash to shareholders (the dividend substitution effect). I document that the executive stock option incentives to repurchase stock as a substitute for dividends are stronger when firms have weak shareholder rights and the level of information asymmetry positively influences managerial stock option incentives to repurchase stock. Furthermore, prior research indicates that information asymmetry is positively associated with stock repurchases. I also provide evidence indicating that the relationship between information asymmetry and stock repurchases is stronger when firms have weaker shareholder rights.
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Date Issued
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2015
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PURL
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http://purl.flvc.org/fau/fd/FA00004373, http://purl.flvc.org/fau/fd/FA00004373
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Subject Headings
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Corporate governance, Corporations -- Finance, Dividends -- Econometric models, Employee stock options, Investment analysis, Stock options -- Econometric models
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Format
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Document (PDF)
