Testing trade-off and pecking order predictions about dividends and debt文档.pdf

The Society for Financial Studies Testing Trade-Off and Pecking Order Predictions about Dividends and Debt Author(s): Eugene F. Fama and Kenneth R. French Reviewed work(s): Source: The Review of Financial Studies, Vol. 15, No. 1 (Spring, 2002), pp. 1-33 Published by: Oxford University Press. Sponsor: The Society for Financial Studies. Stable URL: /stable/2696797 . Accessed: 21/09/2012 07:29 Your use of the JSTOR archive indicates your acceptance of the Terms Conditions of Use, available at . /page/info/about/policies/terms.jsp . JSTOR is a not-for-profit service that helps scholars, researchers, and students discover, use, and build upon a wide range of content in a trusted digital archive. We use information technology and tools to increase productivity and facilitate new forms of scholarship. For more information about JSTOR, please contact support@. . Oxford University Press and The Society for Financial Studies are collaborating with JSTOR to digitize, preserve and extend access to The Review of Financial Studies. Testing Trade-Off and Pecking Order Predictions About Dividends and Debt Eugene F. Fama University of Chicago Kenneth R. French Dartmouth College Confirmingpredictionssharedby the trade-offandpecking ordermodels, moreprofitable firms and firms with fewer investments have higher dividend payouts. Confirmingthe model but the trade-offmodel, more profitablefirms areless pecking order contradicting levered.Firmswith more investmentshave less marketleverage,which is consistentwith the trade-offmodel and a complex pecking order model. Firms with more investments have lower long-termdividendpayouts,but dividendsdo not varyto accommodateshort- variation term variationin investment.As the pecking order model predicts, sh