This paper proposes an explanation, according to a given investment policy and capital structure, for why some firms pay dividends and issue equity simultaneously. For individual investors, this combination invites additional taxes, wasteful flotation costs, and adverse selection. Within the...

This paper presents an alternative theory explaining why firms adopt dividend policies of various kinds at intermediate levels. We extend the dividend clientele model from a traditional corner-solution framework to an interior-solution framework. For some investors, intertemporal double taxation...

This paper presents an alternative theory of payout policy explaining why firms do not perfectly substitute share repurchases for dividends. Existing empirical findings have shown that individual investors tend to prefer high dividends, whereas institutional investors appear to prefer low...

As an alternative version of the side-payment model, this paper presents a demonstration of how the necessity of winning majority support of shareholders influences the relation between a blockholder's monitoring incentive and a firm's dividend policy. When dividend-averse individuals...