This paper documents that the increase in public debt can lead to higher dividend payout to shareholders, which … higher public debt-to-GDP ratio can predict both higher dividend growth and higher stock returns, and the predicted changes … common component among stock returns and dividend growth. We argue that i) public debt can drive the co-movement among …

tax expenses is responsible for a full one-third of all profit growth for S&P 500 nonfinancial firms over the prior two …