Financial flexibility and the choice between dividends and stock repurchases

• 成果类型: Article
• 署名作者: Jagannathan, M; Stephens, CP; Weisbach, MS
• 署名单位: University of Missouri System; University of Missouri Columbia; University of Illinois System; University of Illinois Urbana-Champaign
• 刊物名称: JOURNAL OF FINANCIAL ECONOMICS
• ISSN/ISSBN: 0304-405X
• DOI: 10.1016/S0304-405X(00)00061-1
• 发表日期: 2000
• 页码: 355-384
• 关键词: Payout policy; STOCK REPURCHASES; Dividends

摘要

This paper measures the growth in open market stock repurchases and the manner in which stock repurchases and dividends are used by U.S. corporations. Stock repurchases and dividends are used at different times from one another, by different kinds of firms. Stock repurchases are very pro-cyclical, while dividends increase steadily over time. Dividends are paid by firms with higher permanent operating cash flows, while repurchases are used by firms with higher temporary, non-operating cash hows. Repurchasing firms also have much more volatile cash flows and distributions. Finally, firms repurchase stock following poor stock market performance and increase dividends following good performance. These results are consistent with the view that the flexibility inherent in repurchase programs is one reason why they are sometimes used instead of dividends. (C) 2000 Elsevier Science S.A. All rights reserved. JEL classification: G32; G35.