shefrin行为公司金融课件Chap07.pptVIP

Chapter 7 DIVIDEND POLICY Behavioral Corporate Finance by Hersh Shefrin Dividends and Individual Investors In the behavioral approach, mental accounting and hedonic editing feature framing effects that lead individual investors to find dividends especially attractive. Older, retired investors find dividends attractive because they view dividends as a replacement for wage and salary income. Young, employed investors find dividends attractive because regular dividends make it easier for them to tolerate risk. Microsoft and Con EdWidows and Orphan Stock? March 2003, Microsoft dividend initiation. July 21, 2004 issue of The Wall Street Journal indicated that Microsoft was moving in the direction of the old ATT model, that is a “widows and orphans” stock. Con Ed omitted dividend in 1974 to much protest. Shareholders were older, retired, and in many cases widowed, who viewed dividend income in the same way as Social Security income. Behavioral Life Cycle Behavioral life cycle hypothesis involves self-control motivated spending rules based on mental accounts for wealth. current income liquid assets Dividends and RiskHedonic Editing Risk is more tolerable when decomposed into a certain prior gain and an uncertain outcome. Total return on a stock decomposes into a dividend yield and a capital gain. Cash dividends play the role of the certain prior gain (bird in the hand). Empirical Evidence Investors over the age of 65 concentrate their stock holdings in firms that pay high dividends, especially if the investors are retired. These investors hold over 80% of their stock portfolio in dividend paying stocks. In contrast, investors under the age of 45 hold 65% of their portfolios in dividend paying stocks. Contrast with Institutional Investors Among institutional investors, pension funds and banks find dividends attractive mainly because of stricter “prudent-man” rules, rather than because of a sizeable payout. Evidence suggests that institutional investors fa