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- Title
DIVIDEND POLICY AND NEW EQUITY FINANCING.
- Authors
HORNE, JAMES C. VAN; MCDONALD, JOHN G.
- Abstract
The purpose of this paper is to investigate the combined effect of dividend policy and new equity financing decisions on the market value of the firm's common stock. Some basic aspects of a conceptual framework are explored, and empirical tests are performed with year-end 1968 cross sections for two industries, using a well-known valuation model. The results must be considered exploratory, but the method of analysis should prove useful in future investigations.
- Subjects
STOCK prices; VALUATION of corporations; INVESTORS; STOCKHOLDERS equity; RETAINED earnings; CAPITAL gains
- Publication
Journal of Finance (Wiley-Blackwell), 1971, Vol 26, Issue 2, p507
- ISSN
0022-1082
- Publication type
Article
- DOI
10.1111/j.1540-6261.1971.tb00911.x