Dividend policy relevance in a levered firm—The binomial case

Dan Galai; Zvi Wiener

doi:10.1016/j.econlet.2018.08.021

Dividend policy relevance in a levered firm—The binomial case

Dan Galai, Zvi Wiener^*

^*Corresponding author for this work

Business Administration

Research output: Contribution to journal › Article › peer-review

2 Scopus citations

Abstract

In this paper we illustrate a world with perfect capital markets and with no taxes, and show the condition under which the stockholders in a levered firm will be (un-) affected by the dividend policy. We illustrate it for a firm's value which follows the binomial distribution.

Original language	English
Pages (from-to)	78-80
Number of pages	3
Journal	Economics Letters
Volume	172
DOIs	https://doi.org/10.1016/j.econlet.2018.08.021
State	Published - Nov 2018

Bibliographical note

Publisher Copyright:
© 2018 Elsevier B.V.

Keywords

Binomial contingent claim model
Corporate debt
Dividend policy

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10.1016/j.econlet.2018.08.021

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title = "Dividend policy relevance in a levered firm—The binomial case",

abstract = "In this paper we illustrate a world with perfect capital markets and with no taxes, and show the condition under which the stockholders in a levered firm will be (un-) affected by the dividend policy. We illustrate it for a firm's value which follows the binomial distribution.",

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doi = "10.1016/j.econlet.2018.08.021",

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KW - Binomial contingent claim model

KW - Corporate debt

KW - Dividend policy

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JO - Economics Letters

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Dividend policy relevance in a levered firm—The binomial case

Abstract

Bibliographical note

Keywords

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