Past literature suggests that success rates in professional basketball are independent of past performance and this has been interpreted as evidence that the commonly shared belief in Hot Hands (<italic>HH</italic>) is a cognitive illusion. This is often cited as evidence of biased decision making, even when...

Fama and French (2006) use the dividend-discount model to develop the role of expected profitability, expected investment, and the book-to-market ratio as predictors of stock returns. One reported empirical result is anomalous. The valuation model establishes that the comparative static relation...

In this note, a loss shared by the security holders of merging firms is pointed out: separate corporate entities provide double protection against future negative cash flows that are partof any production process (e.g., when customer or employee liabilities exceed future income), independent of...

We analyze a model in which firms signal their quality by using financial policies to commit to cash outflows. Two financial policies may be used: dividend and debt-service obligations. We find sufficient conditions for the informational equilibrium to entail concommitant use of both dividends...

The purpose of this book is to review the theory and empirical evidence regarding the impact of dividend policy on shareholder wealth. It cuts to the quick of such long-standing questions as Why do corporations pay dividends? and Why should investors care? With relevant anecdotes, surveys,...