Do Investor Preferences Drive Corporate Dividend Policy?

Abstract

This research paper aims at assessing whether managers adapt their dividend policies to the changing preferences of investors, as predicted by the catering theory of dividends. To answer this question, we used an modified approach based on the method proposed by Baker and Wurgler [2004a] in their studies on dividend catering.

Keywords

• dividend policy
• catering theory of dividends
• behavioral corporate fnance
• g35
• g02