The Investment Opportunity Set and Corporate Financing, Dividend, and Compensation Policies
Posted: 6 Sep 2006
We examine explanations for corporate financing-, dividend-, and compensation-policy issues. We document robust empirical relations among corporate policy decisions and various firm characteristics. Our evidence suggests contracting theories are more important in explaining cross-sectional variation in observed financial, dividend, and compensation policies than either tax-based or signaling theories.
Keywords: Investment opportunity set, financing policy, dividend policy, compensation policy
JEL Classification: G31, G32, G35, J33
Suggested Citation: Suggested Citation