Do dividend clienteles exist? Evidence on dividend preferences of retail investors
Publication
, Journal Article
Graham, JR; Kumar, A
Published in: Journal of Finance
June 1, 2006
We study stock holdings and trading behavior of more than 60,000 households and find evidence consistent with dividend clienteles. Retail investor stock holdings indicate a preference for dividend yield that increases with age and decreases with income, consistent with age and tax clienteles, respectively. Trading patterns reinforce this evidence: Older, low-income investors disproportionally purchase stocks before the ex-dividend day. Furthermore, among small stocks, the ex-day price drop decreases with age and increases with income, consistent with clientele effects. Finally, consistent with the behavioral "attention" hypothesis, we document that older and low-income investors purchase stocks following dividend announcements.
Duke Scholars
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Published In
Journal of Finance
DOI
EISSN
1540-6261
ISSN
0022-1082
Publication Date
June 1, 2006
Volume
61
Issue
3
Start / End Page
1305 / 1336
Related Subject Headings
- Finance
- 3801 Applied economics
- 3502 Banking, finance and investment
- 1502 Banking, Finance and Investment
Citation
APA
Chicago
ICMJE
MLA
NLM
Graham, J. R., & Kumar, A. (2006). Do dividend clienteles exist? Evidence on dividend preferences of retail investors. Journal of Finance, 61(3), 1305–1336. https://doi.org/10.1111/j.1540-6261.2006.00873.x
Published In
Journal of Finance
DOI
EISSN
1540-6261
ISSN
0022-1082
Publication Date
June 1, 2006
Volume
61
Issue
3
Start / End Page
1305 / 1336
Related Subject Headings
- Finance
- 3801 Applied economics
- 3502 Banking, finance and investment
- 1502 Banking, Finance and Investment