A lintner model of dividends and managerial rents
By: Bart M. Lambrecht, Stewart C. Myers
Contributors: Myers, Stewart C.; National Bureau of Economic Research
Series: NBER working paper series -- working paper 16210; Working paper series (National Bureau of Economic Research : Online) -- working paper no. 16210.
Publisher: National Bureau of Economic Research
Published: 2010
Place of publication: Cambridge, MA
Language: eng
Format: Electronic resource
Description: "We develop a model where dividend payout, investment and financing decisions are made by managers who attempt to maximize the rents they take from the firm.  But the threat of intervention by outside shareholders constrains rents and forces rents and dividends to move in lockstep.  Managers are risk-averse, and their utility function allows for habit formation.  We show that dividends follow Lintner's (1956) target-adjustment model.  We provide closed-form, structural expressions for the payout target and the partial adjustment coefficient.  Risk aversion causes managers to underinvest, but habit formation mitigates the degree of underinvestment.  Changes in corporate borrowing absorb fluctuations in earnings and investment"--National Bureau of Economic Research web site.
Notes: Title from PDF file as viewed on 8/19/2010.

Includes bibliographical references.

Also available in print.

System requirements: Adobe Acrobat Reader.

Mode of access: World Wide Web.