This article extends the Marsh-Merton (1987) model to test the information effects of dividends. A generalized friction method provides for more reliable estimates of the relationship between dividends and the firm's permanent earnings by resolving the estimation problems caused by the dividend...

The authors propose a rational signaling model to investgate the information content of dividends. The model provides a direct test of the relation between unexpected dividend and earnings changes. In identifying the component of unexpected dividend changes, the authors suggest an expectations...

This paper examines whether a firm's sinking fund decision is affected by agency costs. The paper argues that sinking funds can be an effective device to resolve the problems of information asymmetry, risk incentives, and suboptimal investments. Empirical tests are provided. Results show that...

This article proposes a two-step method for estimating the impact of bond indenture provisions and other financial variables on the risk and yields of investment-grade and speculative corporate bonds. In the first step, the default risk of bonds is estimated as a function of indenture provisions...