The Dividend premium measure from the Catering theory of dividend: A test on CAC 40 Stock Index
碩士 === 國立政治大學 === 國際經營管理英語碩士學位學程(IMBA) === 103 === Investor’s demand for dividends fluctuates over time. Consequently, investors put a stock price premium on dividend payers when their sentiment for payers is favourable, while they don’t when they prefer nonpayers. If firms issue dividends according...
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| Format: | Others |
| Language: | en_US |
| Online Access: | http://ndltd.ncl.edu.tw/handle/a948dn |
| Summary: | 碩士 === 國立政治大學 === 國際經營管理英語碩士學位學程(IMBA) === 103 === Investor’s demand for dividends fluctuates over time. Consequently, investors put a stock price premium on dividend payers when their sentiment for payers is favourable, while they don’t when they prefer nonpayers. If firms issue dividends according to this market sentiment, then the firms cater to investor demand. Based on Baker and Wurgler (2004), we empirically test if the catering theory of dividends can be applied to the French stock market.
Our study period ranges from 2000 to 2014 and we select the CAC 40 market index. We use the market-to-book ratio as a measure of investor sentiment. In contrast with the finding of Baker and Wurgler (2004), we failed to prove that managers cater to investor demand to pay dividends.
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