Dividend policy and the earned / contributed capital mix : a test of the life-cycle theory

@inproceedings{DeAngeloa2006DividendPA,
  title={Dividend policy and the earned / contributed capital mix : a test of the life-cycle theory},
  author={Harry DeAngeloa and Linda DeAngeloa and Ren{\'e} M. Stulzb},
  year={2006}
}
  • Harry DeAngeloa, Linda DeAngeloa, René M. Stulzb
  • Published 2006
Consistent with a life-cycle theory of dividends, the fraction of publicly traded industrial firms that pay dividends is high when retained earnings are a large portion of total equity (and of total assets) and falls to near zero when most equity is contributed rather than earned. We observe a highly significant relation between the decision to pay dividends and the earned/contributed capital mix, controlling for profitability, growth, firm size, total equity, cash balances, and dividend… CONTINUE READING

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