Timeline for Unexplained economic puzzles?
Current License: CC BY-SA 3.0
5 events
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| Jun 17, 2020 at 9:40 | history | edited | CommunityBot |
Commonmark migration
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| Sep 26, 2017 at 15:27 | comment | added | skoestlmeier | The point is, that wether a company pays out dividends or not should not affect its valuation. Its clear for equilibrium models, but needs explanation for DDM (and their derivatives). Its not the expectation error or similar effects. Consider you hold 100% of a company. Paying out financial assets as a dividend or let them within the company is exactly the same situation. But what can be seen in empirical research is: Companies who pay out dividends are far higher rated then those who don't pay dividends. Yet no explanation, e.g. taxes, asymmetries, etc. captures this observation fully. | |
| Sep 22, 2017 at 15:34 | comment | added | luchonacho | But which is the actual puzzle? In the payment day, you are jumping ahead on period, which means $D_0$ becomes $D_1$, and an unknown dividend is now known, so it is reasonable to expect an adjustment due to expectation error. Surely a very simple model cannot fully capture the problem. I don't quite get why this is a puzzle. | |
| Sep 22, 2017 at 14:29 | history | edited | skoestlmeier | CC BY-SA 3.0 |
typo
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| Sep 22, 2017 at 13:06 | history | answered | skoestlmeier | CC BY-SA 3.0 |