Journal of Financial Services Research

, Volume 19, Issue 2–3, pp 115–129 | Cite as

An Empirical Examination of the Price-Dividend Relation with Dividend Management

  • Lucy F. Ackert
  • William C. Hunter


Some recent empirical evidence suggests that stock prices are not properly modeled as the present discounted value of expected dividends. In this paper, we estimate a present value model of stock price that is capable of explaining the observed long-term trends in stock prices. The model recognizes that firm managers control cash dividend payments. The model estimates indicate that stock price movements may be explained by managerial behavior.

stock price determination volatility dividend payout present value model 


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Copyright information

© Kluwer Academic Publishers 2001

Authors and Affiliations

  • Lucy F. Ackert
    • 1
    • 2
  • William C. Hunter
    • 3
  1. 1.Department of Economics and Finances, Michael J. Coles College of BusinessKennesaw State UniversityKennesaw
  2. 2.Research DepartmentFederal Reserve Bank of AtlantaUSA
  3. 3.Research DepartmentFederal Reserve Bank of ChicagoUSA

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