Patterns in payout policy and payout channel choice
Renneboog,L.D.R. Trojanowski,G.
Renneboog,L.D.R.
Trojanowski,G.
Abstract
We study the decision to distribute funds as well as the choice of the payout channel (i.e. dividends, repurchases, or both). Our analysis of the payout policy of UK firms demonstrates that the importance of share repurchases is increasing, but dividends still constitute a vast proportion of the total payout. We document that there is a relation between the presence of blockholders and the choice of the payout channel. We find that payout decisions are influenced by directors’ liquidity needs but are not consistent with the agency theory of payout. We also reject the tax-clientele explanation for payout choices.
Description
Appeared earlier as CentER DP 2005-22 (rt)
Date
2011
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Research Projects
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Citation
Renneboog, L D R & Trojanowski, G 2011, 'Patterns in payout policy and payout channel choice', Journal of Banking & Finance, vol. 35, no. 6, pp. 1477-1490.