Accounting and Finance Seminar Series

November
15

Do firms actively cater to dividend clienteles? Evidence from merger-induced changes in shareholder structure

📅15 November 2017
15:00 - 16:30 (1 hour 30 minutes)

Speakers

👤Meziane Lasfer, Professor of Finance, Cass Business School

Description

Abstract

We use merger-induced changes in shareholder structure to test for active catering to dividend clienteles. Following mergers, acquirers adjust their dividend policy towards that of the target, but only when they inherit target shareholders through stock swaps. This effect is stronger when target shareholders’ stake in the combined firm is larger, when dividends are tax-advantaged, and when acquirer’s governance is weaker than that of the target. Ex-ante, differences in dividend policy discourage the use of stock as payment. Aside from clientele effects, mergers are associated with reduced payout and propensity to pay, contributing to the disappearance of dividends.

Venue

LT4
University of Edinburgh Business School
29 Buccleuch Place, Edinburgh, Lothian EH8 9JS, United Kingdom

Contact

👤 Yue (Lucy) Liu
yue.liu@ed.ac.uk
📞 +44 (0)131 650 4309

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