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Participation rates of dividend reinvestment plans: Differences between utility and nonutility firms
Author(s) -
Todd Janet M.,
Domian Dale L.
Publication year - 1997
Publication title -
review of financial economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.347
H-Index - 41
eISSN - 1873-5924
pISSN - 1058-3300
DOI - 10.1016/s1058-3300(97)90001-x
Subject(s) - dividend , cash , dividend policy , business , monetary economics , economics , financial economics , econometrics , finance
This paper examines survey data to study features of dividend reinvestment plans and their relationship to participation rates. Differences between utility and nonutility firms are examined. Discount features and new issue shares are found to be used more often by the utility group, while both groups allow cash contributions along with the dividend reinvestment. Discount features and high returns are correlated with higher participation rates. There is also some preliminary evidence that participation rates by large blockholders may increase trading volume.