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| Author: | DeAngelo, H. DeAngelo, L. Stulz, R.M. |
| Title: | Dividend policy and the earned/contributed capital mic: a test of the life-cycle theory |
| Journal: | Journal of industrial ecology
2006 : AUG, VOL. 81:2, p. 227-254 |
| Index terms: | agency theory capital dividend policy dividends life cycles |
| Language: | eng |
| Abstract: | Consistent with a life-cycle theory of dividends, the fraction of publicly traded industrial companies that pay dividends is high when retained earnings are a large portion of total equity (and of total assets) and falls to near zero when most equity is contributed rather than earned. This study observes a highly significant relation between the decision to pay dividends and the earned/contributed capital mix, controlling for profitability, growth, company size, total equity, cash balances, and dividend history, a relation that also holds for dividend initiations and omissions. |
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