An Empirical Examination of the Price-Dividend Relation with Dividend Management
Lucy F. Ackert
Kennesaw State University - Michael J. Coles College of Business; Federal Reserve Bank of Atlanta
William C. Hunter
Tippie College of Business; University of Connecticut - School of Business
Journal of Financial Services Research, Vol. 19, No. 2/3, April 2001
Abstract:
Some recent empirical evidence suggests that stock prices are not properly modeled as the present discounted value of expected dividends. In this paper, we estimate a present value model of stock price that is capable of explaining the observed long-term trends in stock prices. The model recognizes that firm managers control cash dividend payments. The model estimates indicate that stock price movements may be explained by managerial behavior.
Keywords: Stock price determination, volatility, dividend payout, present value model
Accepted Paper Series
Suggested Citation
Ackert, Lucy F. and Hunter, William C., An Empirical Examination of the Price-Dividend Relation with Dividend Management. Journal of Financial Services Research, Vol. 19, No. 2/3, April 2001. Available at SSRN: http://ssrn.com/abstract=280657
