By a News Reporter-Staff News Editor at Investment Weekly News -- Fresh data on Corporate Finance are presented in a new report. According to news originating from Oneonta, New York, by VerticalNews correspondents, research stated, "We examine corporate payout policy in dual-class firms. The expropriation hypothesis predicts that dual-class firms pay out less to shareholders because entrenched managers want to maximize the value of assets under control and the associated private benefits."
Our news journalists obtained a quote from the research from the State University of New York, "The pre-commitment hypothesis predicts that dual-class firms pay out more to shareholders because firms use corporate payouts as a pre-commitment device to mitigate agency costs. Our results support the pre-commitment hypothesis. Dual-class firms have higher cash dividend payments and total payouts, and they use more regular cash dividends rather than special dividends or repurchases, compared to their propensity-matched single-class firms. Dual-class firms with severe free cash flow-related agency problems and few growth opportunities rely even more on corporate payouts as a pre-commitment mechanism."
According to the news editors, the research concluded: "We also rule out the alternative explanation that dual-class firms pay out more because super-voting shareholders lack the ability to generate home-made dividends by selling shares since super-voting shares are often non-tradable or very illiquid."
For more information on this research see: Corporate payout policy in dual-class firms. Journal of Corporate Finance, 2014;26():1-19. Journal of Corporate Finance can be contacted at: Elsevier Science Bv, PO Box 211, 1000 Ae Amsterdam, Netherlands. (Elsevier - www.elsevier.com; Journal of Corporate Finance - www.elsevier.com/wps/product/cws_home/524467)
The news correspondents report that additional information may be obtained from B.D. Jordan, SUNY Coll Oneonta, Sch Business & Econ, Oneonta, NY 13820, United States. Additional authors for this research include M.H. Liu and Q. Wu.
Keywords for this news article include: Oneonta, New York, United States, Corporate Finance, North and Central America
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