An Empirical Examination of the Price-Dividend Relation with Dividend Management

Posted: 12 Sep 2001

See all articles by Lucy F. Ackert

Lucy F. Ackert

Kennesaw State University - Michael J. Coles College of Business

William C. Hunter

University of Connecticut - School of Business; Tippie College of Business

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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

Suggested Citation

Ackert, Lucy F. and Hunter, William Curt and Hunter, William Curt, An Empirical Examination of the Price-Dividend Relation with Dividend Management. Available at SSRN: https://ssrn.com/abstract=280657

Lucy F. Ackert (Contact Author)

Kennesaw State University - Michael J. Coles College of Business ( email )

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Department of Economics and Finance
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William Curt Hunter

Tippie College of Business ( email )

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University of Connecticut - School of Business ( email )

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