1、 1 外文翻译 原文 Revisiting Managerial Perspectives on Dividend Policy Material Source:JOURNAL OF ECONOMICS AND FINANCEVolume 26Number 3Fall 2002 Author:H.Kent Baker,GaryE.Powell,Theodore Veit One of the more puzzling issues in corporate finance involves dividends. Miller and Modigliani (1961) provide a c
2、ompelling and widely accepted argument for dividend irrelevance in a world with perfect capital markets. Many years later, Miller (1986) recognized that the observed preference for cash dividends is one of the “soft spots in the current body of theory.“ So why do corporations pay dividends, and why
3、do investors care? Black (1976) once described this issue as a dividend “puzzle“ with “pieces that just dontseem to fit.“ To help explain this puzzle, financial economists developed various theories-signaling, tax- preference, agency costs, and bird-in-the-hand explanations. The profusion of theorie
4、s led Ang(1987) to observe, Thus, we have moved from a position of not enough good reasons to explain why dividends are paid to one of too many.“ Advocates of behavioral finance, such as Shefrin and Statman (1984), introduced concepts such as prospect theory and mental accounting to explain why inve
5、stors like dividends. Statman(1997) contends that solving the dividend puzzle is impossible while ignoring the patterns of normal investor behavior. Today, corporate managers are left with a vast and often conflicting body of research about dividends. One way to enhance our understanding of why corp
6、orations pay dividends is to examine the views of managers who are responsible for making such decisions. Past fieldwork and surveys have provided important insights into how managers determine their firms dividend payouts and their views about various dividend policy issues. For example, Lintner(19
7、56) conducted the seminal field study about the determination of dividend policy. Other researchers 2 including Baker, Farrelly, and Edelman(1985) and Powell(1999) surveyed managers to obtain their views about dividend policy. Such studies complement other types of empirical research on dividend pol
8、icy. Our study examines how managers view dividend policy but uses a different data set to extend and refine the scope of previous survey research. Specifically, we survey corporate managers of Nasdaq firms that consistently pay cash dividends to determine their views about dividend policy, the rela
9、tionship between dividend policy and value, and four common explanations for paying dividends-signaling, tax-preference, agency costs, and bird-in-the-hand arguments. Our motivation for conducting this study is to determine whether the evidence simply reaffirms what we already know or provides new i
10、nsights about dividend policy. The study is timely given evidence by Fama and French(2001) of the declining incidence of dividend payers, which not only reflects the changing characteristics of dividend payers but also their lower propensity to pay dividends. In this study, we do not focus on the vi
11、ews about dividend policy of managers from the “typical“ Nasdaq firm because most Nasdaq firms either pay no dividends or pay dividends on an irregular basis. Instead, we investigate the views of a subset of Nasdaq firms, namely, those that consistently pay cash dividends. The fact that most Nasdaq
12、firms do not pay dividends is not surprising given their characteristics. As Damodaran(1999) notes, a firms dividend policy tends to follow the firms life cycle. During the introduction and rapid expansion stages, firms typically pay no or very low dividends. Such firms characterize a large portion
13、of firms trading on Nasdaq. Our study differs from previous research on dividend policy in several ways. First, unlike prior fieldwork and surveys that focus only on NYSE-listed firms from a few industries, we study managers from dividend-paying Nasdaq firms from numerous industries. Michel (1979) a
14、nd Baker (1988) present evidence that dividend policies vary across industries. Our rationale for examining Nasdaq firms rests on the belief that the views of Nasdaq managers may differ from those of NYSE-listed firms because of different firm characteristics such as size. I second, we investigate s
15、everal areas not examined in previous surveys such as views about historical patterns of dividends, dividend life cycle, and 3 residual dividend policy. Finally， unlike most research that focuses on a single explanation of why companies pay dividends, we examine multiple explanations. By taking this
16、 approach we can assess the relative importance of different reasons for paying dividends based on the level of agreement or disagreement with various statements involving each explanation. The remainder of the paper is organized as follow The next section provides a brief review of the relevant div
17、idend literature. The third section presents our research questions and empirical predictions followed by discussion of methodology and limitations in the fourth section .The fifth section presents our survey results ,and the final section provides a summary and conclusions. Previous Research In thi
18、s section, we present three basic areas of dividend research .First,we discuss Lintners(1956)classic study that investigates how corporate managers determine their firms dividend policies. We also review some of the subsequent research related to Lintners findings. Second, we review studies that exa
19、mine whether dividend policy affects firm value Third; we present major research findings related to four common explanations for paying dividends-signaling, tax- preference, agency costs, and bird-in-the-hand arguments. Because the amount of research conducted in these areas is voluminous, we confi
20、ne our review to a few key research findings in each area. Determining a Firms Dividend In his classic study, Lintner (1956) reports that firms have long-run target dividend payout ratios and place their attention more on dividend changes than on absolute dividend levels. He also finds that dividend
21、 changes follow shifts in long-run sustainable earnings (managers smooth earnings) and managers are hesitant to make dividend changes that may later need to be reversed. Managers also try to stabilize dividends and avoid dividend cuts. Lintner developed a partial- adjustment model to describe the di
22、vidend decision process that explained 85 percent of year-to- year dividend changes. Several studies including Fama and Babiak (1968), Baker, Farrelly, and Edelman (1985), and Baker and Powell (1999) support Lintners behavioral model. Benartzi, Michaely, and Thaler (1997) conclude that “.Lintners mo
23、del of dividends remains the best description of the 4 dividend setting process available.“ Dividend Policy and Value Much empirical research exists investigating whether dividend policy affects firm value. Graham and Dodd (1951) and Gordon (1959) argue that an increase in the dividend payout increa
24、ses stock price (value) and lowers the cost of equity, but empirical support for this position is weak. Others such as Litzenberger (1979) and Ramaswamy (1982),Blume(1980),and Ang and Peterson(1985) take the opposite position. Their studies report that stocks with high dividend payout rations have h
25、igher required returns and therefore lower prices. Still others such as Black and Scholes (1974), Miller(1978) and Scholes (1982), Miller (1986), and Bemstein (1996) maintain that dividend policy makes no difference because it has no effect on either stock prices or the cost of equity. Researchers h
26、ave tested these alternative theories of dividend policy but have not obtained conclusive results. Thus, the issue of which explanation of dividend policy is most correct remains unresolved. Explanations for Paying Dividends The finance literature contains four standard explanations for paying divid
27、ends-signaling, tax-preference, agency costs, and bird-in-the-hand. The signaling, or asymmetric information, models for paying dividends, developed by Bhattacharya(1979),John and Williams(1985),and Miller and Rock(1985),suggest that managers as insiders choose dividend payment levels and dividend i
28、ncreases to signal private information to investor. Managers have an incentive to signal this private information to the investment public when they believe that the current market value of their firms stock is below its intrinsic value. The increased dividend payment serves as a credible signal whe
29、n other firms that do not have favorable inside information cannot mimic the dividend increase without unduly increasing the chance of later incurring a dividend cut. Strong support exists for the signaling explanation including research by Aharony and Swary (1980), Asquith and Mullins (1983), Kalay
30、 and Lowenstein (1986), Healey and Palepu (1988), and Nissim and Ziv (2001). A second explanation for paying dividends is tax-preference theory. Favorable tax treatment on capital gains (lower capital gains tax rate and deferral of capital gains tax) should cause investors to prefer no 5 dividend-pa
31、ying stocks. Tests of this tax-preference explanation for paying or not paying dividends take two forms. According to Brennans (1970) version of the capital asset pricing model, dividend-paying stocks must offer higher pre-tax returns than no dividend- paying stocks, all else equal. Brennans empiric
32、al tests, however, are mixed. Also, Black and Scholes (1974) find no evidence of this tax effect, while Litzenberger and Ramaswamy (1979) and Kalay and Michaely (1993) find evidence that pre-tax returns are related to dividend yield. Other studies examine the ex-dividend date price drop. Favorable c
33、apital gains tax treatment could cause the price drop to be less than the dividend payment and cause investors to prefer no dividend-paying stocks. Empirical evidence on this matter is also inconclusive. For example, Elton and Gruber (1970) find an ex-dividend date price drop that is less than the d
34、ividend amount, but Michaely (I991) finds an ex-dividend date price drop equal to the dividend payment. Another explanation for why firms might pay dividends is based on agency relationships between various claimholders of the firm. Easterbrook (1984) argues that firms pay dividends to help reduce t
35、he agency costs associated with the separation of ownership and control. By paying dividends, managers must raise funds more frequently in the capital markets where they are subjected to scrutiny and the disciplining effects of investment professionals. Jensen (1986) makes a similar agency-theory ar
36、gument where managers pay dividends to reduce the firms discretionary free cash flow that could be used to fund suboptimal investments that benefit managers but diminish shareholder wealth. Rozeff (1982), Lang and Litzenberger (1989), Agrawal and Jayaraman (1994), and Jensen, Solberg, and Zorn (1992
37、) provide empirical support for these agency explanations for paying dividends. Finally, the bird-in-the-hand explanation asserts that paying higher dividends increases firm value because dividends represent a “sure thing“ while future share price appreciation is uncertain. Miller and Modigliani (19
38、61) refer to this as the bird-in-the-hand fallacy. Bhattacharya (1979) correctly argues that the riskiness of a projects cash flows determines a firms risk and an increase in dividend payout today will simply result in an equivalent drop in the stocks ex-dividend price. Thus, increasing the dividend
39、 today will not 6 increase a firms value by reducing the riskiness of future cash flows. Although virtually no empirical support exists for the bird-in-the-hand explanation for paying dividends, we want to determine if managers views are consistent with previous theoretical and empirical research. R
40、esearch Questions and Empirical Predictions We address three major research questions in this study. First, what views do Nasdaq managers from dividend-paying firms have on the dividend-setting process? We expect that out survey respondents strongly agree with statements involving Lintners(1956)mode
41、l on dividend policy. Lintners famous investigation of dividend policy stresses that firms only increase dividends when management believes that earnings have permanently increased. As previously discussed, much support exist for Lintners description of how firms set their dividend payments. We expe
42、ct the Nasdaq firms studied, all of which have establish patterns of paying dividends, to hold similar views. Second, do corporate managers of dividend-paying Nasdaq firms believe a firms dividend payout can affect firm value? Based on a set of highly restrictive assumptions, Miller and Modigliani (
43、1961) contend that dividend policy has no effect on either the price of a firms stock or its cost of capital. We expect that managers generally believe that dividend policy matters because they operate in a world in which market imperfection can make dividend policy relevant. Therefore, we expect to
44、 observe general agreement by managers of Nasdaq firms participating in our study with statements relating to the relationship between dividend policy and value. Studies by Lintner (1956), Baker, Farrelly, and Edelman (1985), and others report that managers believe dividend stability is desirable. I
45、f this position is correct, investors should prefer stocks that pay more predictable dividends to those that pay the same amount of dividends in the long run but in a more erratic manner. We do not expect the majority of respondents to agree with statements involving the residual dividend model, whi
46、ch implies that dividends are paid out of “leftover“ earnings. Although using the residual policy may help a firm set its long-run target payout ratio, we believe 7 that managers typically do not use this approach to guide the payout in any one year because this would lead to erratic dividends. Third, what explanations for paying dividends do Nasdaq managers tend to favor? As previously discussed, researchers have conducted many studies involving various explanations of why companies pay dividends. The empirical evidence is generally consis
