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Dividends and the Resolution of Uncertainty
Author(s) -
KEANE SIMON M.
Publication year - 1974
Publication title -
journal of business finance and accounting
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.282
H-Index - 77
eISSN - 1468-5957
pISSN - 0306-686X
DOI - 10.1111/j.1468-5957.1974.tb00870.x
Subject(s) - dividend , economics , preference , productivity , financial economics , business , monetary economics , actuarial science , finance , microeconomics , macroeconomics
Investors’ alleged preference for current rather than future dividends cannot, it is argued, be explained by the hypothesis of a progressively higher discount rate for more distant dividends to reflect increasing riskiness. It is more likely to be caused by inadequate standards of disclosure by companies concerning their intended uses of the funds retained by them, as compared with the standards required for external sources of finance, and by the market's consequent lack of confidence in the productivity of the former.