Question: Why do firms with diverse shareholder bases typically pay higher dividends than private firms or public firms with more-concentrated ownership structures? How are fixed dividends

Why do firms with diverse shareholder bases typically pay higher dividends than private firms or public firms with more-concentrated ownership structures? How are fixed dividends used as a bonding (commitment) mechanism by managers of firms with dispersed ownership structures and large amounts of excess cash flow?

Step by Step Solution

★★★★★

3.40 Rating (178 Votes )

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock

Firms with more diverse ownership most likely have higher agency ... View full answer

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Document Format (1 attachment)

428-B-C-F-P-P (30).docx

120 KBs Word File

Students Have Also Explored These Related Corporate Finance Questions!

Apple Inc. accumulates large amounts of excess cash throughout the year. It typically invests these funds in marketable securities until they are needed. The company's most recent financial...

Apple Inc. accumulates large amounts of excess cash throughout the year. It typically invests these funds in marketable securities, both short term and long term. The companys most recent financial...

Why is ownership more concentrated in developing countries than in developed countries?

After working for the past four years as a financial analyst for New Power Corporation, you receive a well-deserved promotion. You have been appointed to work on special projects for Mr. Larkin, the...

Question 1 The Jumbo Group restaurant chain launched its initial public offering (IPO) in October 2015. As a financial analyst of Tiger Investment Fund, your boss has requested for you to brief her...

identify how early "adaptation" to Chinese ownership, capital, and labor system shaped Lenovo's growth and globalization. Culture, the first element of the CAGE framework presented in the article...

Read Accounting Headline 7.9 and, adopting a Positive Accounting Theory perspective, consider the following issues: a)If a new accounting standard impacts on profits, should this impact on the value...

hello, can you please help me answer the questions attached. Attached is the case merger and sample write-up. Its be in Times New Roman 12-point font, double-spaced and 4 pages. Any supporting...

MaDonna's has just completed an initial public offering. The firms sold 6 million shares at an offer price of $16 per share. The underwriting spread was $.50 per share. The price of the stock closed...

A study has shown that the probability distribution of X, the number of customers in line (including the one being served, if any) at a checkout counter in a department store, is given by P(X = 0) =...

Find the center of mass of the triangle with vertices (a,0), (0, b), (0, c) (a > 0, b> c). How would you verify that your answer is correct? Discuss but do not submit. Give an example of a planar...

The regression equation. The equation of a leastsquares regression line is y = 10 + 5x. (a) What is the value of y for x = 5? (b) If x increases by one unit, what is the corresponding increase in y?...

The auditors were very pleased to give the company their ..... ... -.. ...... approval for the next year.

Multiple Choices 1. Which of the following businesses is the least likely to be operated as a partnership? a. Accounting firms b. Doctors offices c. Lawyers offices d. Steel foundry 2. Which of the...

State the main differences and similarities between sole proprietorships and partnerships.

Janice borrowed $100,000 from friends and family to start her company (a sole proprietorship). Business has been poor recently, and Janice has decided to cease operations and liquidate the firm. She...

Methods of variable selection like (Forward,backward, step-wise selection) can be quick and cheap to achieve but can present some issues. Describe 5 issues that arise with these methods of variable...

4. Construct a confidence interval around the sample mean X = 25 for the following conditions: a. N = 25, s = 15, 95% confidence level b. N = 25, s = 15, 90% confidence level c. X = 4.5, = 0.05, df =...

1. need answers for a,b,c,d Tony Begay at Saguaro Funds. Torry Begay, a currency trader for Chicago-based Saguaro Funds, uses the following futures quotes, on the British pound ( f ) to speculate on...