We examine the intraday trading response of participants in the common stock market and in the preferred stock market to announcements of dividend increases on common stock. We find that participants in the preferred stock market respond more slowly to the announcement than those in the common...

We examine the underinvestment rationale for corporate hedging and test the hypothesis that if firms hedge to reduce both their reliance on external funds and the volatility of internal cash flow, then their investment spending should be less sensitive to prehedged cash flow. Our results are...