In this paper we try to better understand the adverse consequences of mandatory dividend rules. We identify two main reasons why firms may pay only the mandatory minimum dividend: financial constraints and private benefits. We also argue that the consequences of these rules for firms should...

In this paper we try to understand the adverse consequences of mandatory dividend rules. We identify two main reasons why firms pay only the mandatory dividend: financial constraints and private benefits. Using a sample of Brazilian companies, we found evidences that firms that pay only the...