Review of: the Evolving Relation Between Earnings, Dividends, and Stock Repurchases

2.)
Name of the paper: The evolving relation amongst earnings, dividends, and stock(a) repurchases
Author(s): Douglas J. mule driver University of Chicago, Graduate School of Business
Year of publication: 2008
Name of daybook: Journal of Financial Economics
Page count for paper: 28 pages (pages 582-609 in JFEC)

3.)
The main research straits is: are stock repurchases being used as a substitute for dividends? The fountain hypothesizes that repurchases are exceedingly more common than dividends in wrong of payouts.

4.)
This question is important because it sheds light on the future payout policies of firms. Since it is hard-fought for firms to pay dividends when they report losses, managers are favoring stock repurchases once they became a viable form of payout in the 1980s. We should care about this question as Finance and Management students because of its impact on payout insurance decisions.
If we are ever in the position of influencing, or hitherto making such decisions, it is crucial to understand the benefits of substituting dividend payouts with repurchases. mule skinner claims that firms that continue to pay dividends do so because of history. If thats the case, so as we begin to fill the executive shoes of the world, perhaps our firms dont need to pay dividends?

5.



)
Skinners data is derived from Compustat Industrial Annual, as made available by WRDS. The data used allows Skinner to use Lintner model regressions to get wind the relation between these firms total payouts (dividends and repurchases) and earnings and find that, as predicted, repurchases adjust quickly to earnings changes while the relation between earnings and dividends becomes weak. (Skinner, 2008) He also uses this compiled data to pick out the 3 different groups conveyed in his hypothesis.

6.)
The data used by Skinner covers years 1980 2005.

7.)
When I read these articles, I perpetually believe researchers know exactly what theyre going to say...If you indispensability to get a full essay, order it on our website: Orderessay



If you want to get a full essay, wisit our page: write my essay .