Three essays on corporate dividend policy
Abstract
The dissertation consists of three separate essays on corporate dividend policy. The first essay is an extension of a signalling model developed by Ross. In one example, we solve Ross's model with a different random variable and provide an explanation of a counterintuitive result. A second example considers signalling when potential earnings are discontinuous due to political risk. The second essay is an econometric investigation into the empirical relationship between dividends and investment policy. The econometric techniques used in this paper do not appear to outpredict naive models. The third essay uses a statistical technique called discriminant analysis to predict future changes in dividend and investment policy. The results suggest that a classification procedure based on the assumption that misclassification costs are inversely related to prior probabilities outpredicts a naive model.
Degree
Ph.D.
Advisors
Carlson, Purdue University.
Subject Area
Finance
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