A Survey of Management Views on Dividend PolicyAuthor(s): H. Kent Baker, Gail E. Farrelly, Richard B. EdelmanSource: Financial Management, Vol. 14, No. 3 (Autumn, 1985), pp. 78-84Published by: Blackwell Publishing on behalf of the Financial Management Association InternationalStable URL: http://www.jstor.org/stable/3665062 .Accessed: 01/07/2011 22:31

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A Survey of Management Views on

Dividend Policy

H. Kent Baker, Gail E. Farrelly, and Richard B. Edelman

Professors Baker and Edelman are at the Kogod College of Business Administration, The American University, Washington, D.C. and Professor Farrelly is at Rutgers University, Newark, New Jersey.

I. Introduction The effect of dividend policy on a corporation's

market value is a subject of long-standing controversy. Black [2, p. 5] epitomizes the lack of consensus by stating "The harder we look at the dividend picture, the more it seems like a puzzle, with pieces that just don't fit together."

Because the academic community has been unable to provide clear guidance about dividend policy, a shift in emphasis is proposed. In the spirit of Lintner's semi- nal work [II], we asked a sample of corporate finan- cial managers what factors they considered most im-

portant in determining their firm's dividend policy. Our objectives were as follows:

(i) to compare the determinants of dividend policy today with Lintner's behavioral model of cor-

porate dividend policy and to assess manage- ment's agreement with Lintner's findings;

(ii) to examine management's perception of signal- ing and clientele effects; and

The authors wish to express their appreciation to Robert A. Taggart and the two anonymous referees for their helpful suggestions.

(iii) to determine whether managers in different in- dustries share similar views about the determi- nants of dividend policy.'

The remaining portion of this paper consists of three sections. Section II sets forth the survey design. Sec- tion III presents the research findings and compares them with theory and other empirical evidence. Sec- tion IV discusses conclusions and limitations of the

study. Because research on dividend policy is already well documented [3], a separate section on the divi- dend literature is not provided. Instead, relevant as- pects of the literature are incorporated into Section III.

II. Survey Design The firms surveyed were listed on the New York

Stock Exchange (NYSE) and classified by four-digit

'Whether industry regulation influences dividend policy is a potentially rich issue, since it is quite conceivable that regulation creates incentives for management to adopt a different payout policy than nonregulated firms. Although briefly addressed in this article, this issue has been examined elsewhere by Edelman, Farrelly, and Baker [61.

78

BAKER, FARRELLY, EDELMAN/A SURVEY ON DIVIDEND POLICY

Exhibit 1. Major Determinants of Corporate Dividend Policy Level of Importance

Maxi- Standard X2 None Slight Moderate Great mum Devi- Proba-

Determinant 0 1 2 3 4 Mean Rank ation bility Industry

1 Anticipated level of firm's future earnings 3.40% 6.80% 89.80% 3.20 1 .74 Mfg 1.75 14.04 84.21 3.12 1 .71 .4572* W/R 1.75 7.89 90.35 3.21 1 .66 Util

9 Pattern of past dividends 6.12 29.25 64.63 2.73 2 .89 Mfg 1.75 29.82 68.42 2.86 2 .74 .4390* W/R 2.63 25.44 71.93 2.94 3 .78 Util

8 Availability of cash 14.29 22.45 63.27 2.70 3 1.04 Mfg 22.81 21.05 56.14 2.42 4 1.15 .0273t W/R 21.24 34.51 44.25 2.35 4 1.02 Util

7 Concern about maintaining or increasing stock 13.61 44.22 42.18 2.30 4 .87 Mfg price 15.79 28.07 56.14 2.47 3 .85 .0001t W/R

3.51 22.81 73.68 2.96 2 .79 Util

*An asterisk indicates inadequate cell size and the chi-square test may not be valid. tUnderlining indicates a significant relationship at the .05 level of significance. Mfg = manufacturing; W/R = wholesale/retail; Util = utility.

Standard Industrial Classification (SIC) codes. A total of 562 NYSE firms were selected from three industry groups: utility (150), manufacturing (309), and whole- sale/retail (103).

A mail questionnaire was used to obtain information about corporate dividend policy. The questionnaire consisted of three parts: (i) 15 closed-end statements about the importance of various factors that each firm used in determining its dividend policy; (ii) 18 closed- end statements about theoretical issues involving cor-

porate dividend policy, and (iii) a respondent's profile including such items as the firm's dividends and earn- ings per share.

A pilot test of the preliminary questionnaire was conducted among 20 firms selected from the three in- dustry groups but not included in the final sample of 562 firms. The final survey instrument was then sent to the chief financial officers (CFOs) of the 562 firms, followed by a second complete mailing to improve the response rate and reduce potential nonresponse bias. The survey, which was conducted during the period between February and April 1983, did not require firms to identify themselves.

The survey yielded 318 usable responses (a 56.6% response rate), which were divided among the three industry groups as follows: 114 utilities (76.0%), 147 manufacturing firms (47.6%), and 57 wholesale/retail (55.3%). Based on dividend and earnings per share data provided by the respondents, the 1981 average

dividend payout ratios were computed. The payout ratio of the responding utilities (70.3%) was consider- ably higher than for manufacturing (36.6%) and wholesale/retail (36.1%).2

III. Results and Discussion A. Determinants of Dividend Policy

Lintner's classic 1956 study [11] found that major changes in earnings "out of line" with existing divi- dend rates were the most important determinant of the company's dividend decisions. However, because these managers believed that shareholders preferred a steady stream of dividends, firms tended to make peri- odic partial adjustments toward a target payout ratio rather than dramatic changes in payout. Thus, in the

2In the electric utility segment, the dividend payout ratio can be distort- ed by non-cash items such as allowance for funds used during construc- tion (AFUDC). Moody's Public Utility Manual reports that in 1981 (the year surveyed), AFUDC made a substantial contribution to electric utility net income. In that year, average earnings per share for the industry was $10.16 from which $7.16 was paid in dividends. This represents an average utility payout of 70.5% in contrast with 34% in the other segments. If AFUDC is excluded from net income, earnings are $4.79 per share. Earnings at this level would represent a utility payout ratio of nearly 150%.

Firms in the other industry segments surveyed also have non-cash items charged or added to their income figure. However, Compustat shows no equivalent items in those segments which are consistently used by all firms and have such a profound effect on reported income. It is our belief that with or without an adjustment in the utility payout ratio for AFUDC, utilities can be viewed as high payout firms relative to manufacturing and wholesale/retail firms.

79

FINANCIAL MANAGEMENT/AUTUMN 1985

short run, dividends were smoothed in an effort to avoid frequent changes.

Fama and Babiak's [8] examination of several alter- native models for explaining dividend behavior sup- ports Lintner's position that managers increase divi- dends only after they are reasonably sure that they can

permanently maintain them at the new level. To examine how well Lintner's model describes

current practice, the respondents were asked to indi- cate the importance of each of 15 factors in determin-

ing their firm's actual dividend policy. A five-point equal interval scale was used for this purpose: 0 = no

importance, 1 = slight importance, 2 = moderate

importance, 3 = great importance, and 4 = maximum

importance. It should be noted that the questionnaire does not follow Lintner's model exactly.

Exhibit 1 provides summary statistics on the major determinants of corporate dividend policy as reported by the three industry groups.3 The results show that the same four determinants (identified later by "D") are considered most important by the three industry groups when ranked by the mean response. The determinant numbers represent the order in which each factor was

presented in the questionnaire. The most highly ranked determinants are the antici-

pated level of a firm's future earnings (Dl) and the

pattern of past dividends (D9). The high ranking of these two factors is consistent with Lintner's findings.

A third factor cited as important in determining divi- dend policy is the availability of cash (D8). Although Lintner does not directly address this determinant, Van Hore [19, p. 23] and Weston and Brigham [20, p. 675] note that liquidity is an important managerial consideration.

A fourth major determinant is concern about main-

taining or increasing stock price (D7). This concern is

particularly strong among utilities who ranked this fac- tor second in importance.

B. Issues Involving Dividend Policy The study's second objective was to investigate

CFOs' perceptions of certain specific issues. The re-

spondents were asked to indicate their general opinion about each of 18 closed-end statements based on a

seven-point equal interval scale: - 3 = strongly dis-

agree, -2 = moderately disagree, -1 = slightly disagree, 0 = no opinion, + 1 = slightly agree, + 2

3Summary statistics on all 15 determinants of corporate dividend policy are available from the authors.

= moderately agree, and + 3 = strongly agree. Ex- hibit 2 provides summary statistics on the responses to each of the 18 statements (identified later by "S") for the three industry groups. The statement numbers refer to the order in which the statements appeared in the

questionnaire. Attitudes on Lintner's Findings. One issue was

the level of agreement with statements supporting Lintner's research findings, namely, S2, S3, S9, S10, and S 17. The results show that several such statements command the highest level of agreement. For exam-

ple, two of the highest ranked statements were that a firm should avoid making changes in its dividend rates that might soon have to be reversed (S10) and should strive to maintain an uninterrupted record of dividend

payments (S17). Respondents also generally agreed that a firm should have a target payout ratio and should

periodically adjust the payout toward the target (S3). Lintner's field work also suggests that managers

focus on the change in the existing rate of dividend payout, not on the dollar amount of dividends (S9) so that investment requirements generally have little ef- fect on modifying the pattern of dividend behavior (S2). On average, managers expressed no strong opin- ion on either of these statements.

Although management's perceptions could differ

significantly from actual decisions, the results in Ex- hibit 1 do not suggest this. That is, managers' views about continuity of dividend policy seem to be translat- ed into factors (DI and D9) that are in fact consistent with dividend continuity.

Attitudes on Theoretical Issues. A major con-

troversy in the literature involves the relationship be- tween dividends and value. Miller and Modigliani (MM) [15] suggest that dividend policy has no effect on the value of the corporation in a world without taxes, transaction costs, or other market imperfec- tions. However, dividends may be relevant to the ex- tent that market imperfections exist. Some of the ex-

planations for dividend relevance include signaling and clientele effects.

Exhibit 2 shows that respondents from all three in-

dustry groups agreed relatively strongly that dividend

payout affects common stock prices (S1). The utilities showed the highest level of agreement with this state- ment. These results seem consistent with the finding reported in Exhibit 1 that concern about maintaining or

increasing stock price (D7) is a major determinant of

corporate dividend policy, especially for utilities.

Management attitudes were also sought on several other theoretical issues. The first issue involves signal-

80

81 BAKER, FARRELLY, EDELMAN/A SURVEY ON DIVIDEND POLICY

Exhibit 2. Issues Involving Corporate Dividend Policy

Disagreement Agreement Statement -3 -2 -1 0 +1 +2 +3 Mean Rank

10 A firm should avoid making changes in its dividend rates that might have to be reversed in a

year or so. 4 Reasons for dividend policy changes should be

adequately disclosed to investors.

17 A firm should strive to maintain an uninterrupted record of dividend payments.

3 A firm should have a target payout ratio and

periodically adjust the payout toward the target.

1 Dividend payout affects the price of the common stock.

7 Investors have different perceptions of the relative riskiness of dividends and retained earnings.

14 Dividend payments provide a "signaling device" of future prospects.

5 The market uses dividend announcements as information for assessing security value.

9 A change in the existing dividend payout is more

important than the actual amount of dividends.

16 A stockholder is attracted to firms which have dividend policies appropriate to the stockholder's particular tax environment.

15 Capital gains expected to result from earnings retention are riskier than are dividend expectations.

6 Management should be responsive to its shareholders' preferences regarding dividends.

12 Investors in low tax brackets are attracted to high-dividend stocks.

2 New capital investment requirements of the firm generally have little effect on modifying the pattern of dividend behavior.

11 Stockholders in high tax brackets are attracted to low-dividend stocks.

8 Dividend distributions should be viewed as a residual after financing desired investments from available earnings.

13 Financing decisions should be independent of a firm's dividend decisions.

18 Investors are basically indifferent between returns from dividends versus those from capital gains.

1.37% 7.02

.00 2.05

.00

.88 1.36 3.51

.00 7.53 3.51

10.53 6.80 7.02 3.51

.69 3.57 1.76 6.80 7.02 7.02 5.52 8.77 5.26

10.27 21.05 34.21

6.85 10.53 6.14 6.29

15.79 9.65

12.33 8.77 7.02

10.96 15.79 9.65

21.92 31.58 24.78 19.31 17.86 14.91 28.08 38.60 61.95 43.54 49.12 38.60 55.48 60.71 76.32

11.64% 5.26 8.77

20.55 19.30 28.95 25.85 10.53 6.14

29.45 17.54 24.56 39.46 42.11 21.93 45.83 42.86 35.96 38.10 49.12 42.11 55.86 52.63 42.98 49.32 50.88 44.74 58.22 45.61 39.47 58.04 52.63 51.75 54.11 56.14 40.35 63.01 56.14 50.00 38.36 31.58 23.89 57.93 55.36 41.23 36.30 26.32 27.43 27.21 22.81 28.07 38.36 33.93 18.42

86.99% 87.72 91.23 77.40 80.70 70.18 72.79 85.96 93.86 63.01 78.95 64.91 53.74 50.88 74.56 53.47 53.57 62.28 55.10 43.86 50.88 38.62 38.60 51.75 40.41 28.07 21.05 34.93 43.86 54.39 35.66 31.58 38.60 33.56 35.09 52.63 26.03 28.07 40.35 39.73 36.84 51.33 22.76 26.79 43.86 35.62 35.09 10.62 29.25 28.07 33.33 6.16 5.36 5.26

2.47 2.16 2.61 2.09 2.14 2.02 1.97 2.28 2.63 1.47 2.09 1.42 1.41 1.46 1.99 1.38 1.34 1.62 1.37 1.18 1.19 1.02 1.07 1.33 .86 .40

-.21 .80 .88

1.37 .76 .51 .85 .68 .91

1.22 .50 .39 .86 .38 .09 .72 .24 .29 .83 .13

-.07 -1.35 -.36 -.58 -.10

- 1.33 - 1.46 -1.77

1 2 2 2 3 3 3 1

4 4 4 6 5 5 4 6 6 5 7 7

10 8 8 8 9

12 16 10 10 7

11 11 12 12 9 9

13 13 11 14 15 14 15 14 13 16 16 17 17 17 15 18 18 18

Standard x2 Devi- Proba- ation bility Industry

.91 Mfg 1.46 .0155*t W/R .77 Util

1.28 Mfg 1.04 .3189* W/R 1.09 Util 1.05 Mfg 1.25 .0001*t W/R .72 Util

1.50 Mfg 1.20 .1715 W/R 1.65 Util 1.02 Mfg 1.23 .0059t W/R 1.22 Util 1.04 Mfg 1.28 .3286* W/R 1.16 Util 1.35 Mfg 1.26 .6904 W/R 1.38 Util 1.29 Mfg 1.47 .2040 W/R 1.39 Util 1.60 Mfg 1.67 .000I t W/R 1.85 Util 1.32 Mfg 1.48 .0225t W/R 1.29 Util 1.37 Mfg 1.47 .2816 W/R 1.44 Util 1.52 Mfg 1.52 .0240t W/R 1.47 Util 1.41 Mfg 1.57 .1057 W/R 1.47 Util 1.88 Mfg 1.97 .0786 W/R 2.05 Util 1.56 Mfg 1.59 .0075t W/R 1.61 Util 1.97 Mfg 2.12 .0001t W/R 1.78 Util 2.12 Mfg 2.04 .7495 W/R 2.04 Util 1.50 Mfg 1.54 .0103t W/R 1.30 Util

*An asterisk indicates inadequate cell size and the chi-square test may not be valid. tUnderlining indicates a significant relationship at the .05 level of significance. Mfg = manufacturing; W/R = wholesale/retail; Util = utility.

. . _

FINANCIAL MANAGEMENT/AUTUMN 1985

ing effects. Managers have access to information about the firm's expected cash flows not possessed by outsid- ers and thus, changes in dividend payout may provide signals about the firm's future cash flows that cannot be communicated credibly by other means. With some

exceptions, empirical studies indicate that dividend

changes convey some unanticipated information to the market [1, 5, 9, 10, 16, 21].

Three statements involved signaling effects (S4, S5, and S14). The respondents from all three industry groups agreed, on average, that dividend payments provide a "signaling device" of future company pros- pects (S14) and that the market uses dividend an- nouncements as information for assessing security val- ue (S5). The respondents also demonstrated a high level of agreement that the reasons for dividend policy changes should be adequately disclosed to investors (S4).

Another theoretical issue concerns the extent to which investors with different dividend preferences form clienteles. Two possible reasons for the forma- tion of clienteles are different perceptions of the rela- tive riskiness of dividends and retained earnings and different investor tax brackets. Although the research evidence is mixed, it does learn toward the existence of clientele effects [7, 12, 171.

Seven statements involved clientele effects (S6, S7, S11, S12, S15, S16, and S18) and these commanded mixed agreement. Respondents from all three industry groups thought that investors have different percep- tions of the relative riskiness of dividends and retained

earnings (S7) and hence are not indifferent between dividend and capital gain returns (S 18). Yet, there was

only slight agreement that a stockholder is attracted to firms with dividend policies appropriate to that stock- holder's tax environment (S16) and that management should be responsive to its shareholders' dividend

preferences (S6). However, the utilities differed from the other two groups, expressing significantly higher levels of agreement on S16 and S6.

C. Industry Influence on Dividend Policy The study's final objective was to investigate differ-

ences in managers' attitudes across three broad indus-

try groups. Studies by Dhrymes and Kurz [4], McCabe [13], and Michel [14] have previously detected some effect of industry classification on corporate dividend

policy. However, Rozeff [18] concluded that a com-

pany's industry does not help to explain its dividend

payout ratio. Rozeff's conclusion is not applicable to utilities since he intentionally excluded regulated com-

panies because their policies may be affected by their

regulatory status. Chi-square analysis was used to test for differences

in the responses among the three industry groups. In order to perform these tests and to avoid inadequate cell sizes, both the five-interval importance scale and the seven-interval disagreement-agreement scale were collapsed into three classes as shown in Exhibits 1 and 2, respectively. Nevertheless, some warnings about low cell counts resulted because of the highly skewed nature of the responses. These tests showed that the responses of the three groups differed significantly at the .05 level among eight of the 15 determinants of dividend policy (partly shown in Exhibit 1) and nine of the 18 issues (Exhibit 2).

Further Chi-square tests were performed using pair- wise comparisons between the industry groups on all 15 determinants and 18 issues. The results revealed that the manufacturing and wholesale/retail firms had no significant differences in responses at the .05 level for those questions with adequate cell sizes. Hence, the differences occurred primarily as a result of the utili- ties' responses relative to either manufacturing or wholesale/retail.

The reported differences between the utilities and the other firms may be due to regulation. For example, since regulation gives utilities monopoly power over a

product enjoying steady demand, their earnings are

comparatively stable. Their risk of having to reduce dividends because of an unexpected decline in earn-

ings is thus less than that for many other companies. It is also plausible that regulation creates incentives

for management to adopt a different payout policy than

nonregulated firms. This incentive may stem from the fact that funds retained inside the firm are implicitly subject to expropriation by the regulators in future rate cases. Hence, managers of regulated firms may view the world differently than managers operating in a

competitive environment. On the other hand, the differences may have nothing

to do with regulation per se but with other characteris- tics. For example, Rozeff [18] notes that the apparent- ly significant industry effect found in past studies re- sults from the fact that other variables are often similar within a given industry. These similarities are the fun- damental reason why companies in the same industry have similar dividend payouts.

Utilities are high payout firms relative to the two other groups and this characteristic makes them differ- ent. To control for dividend payout, the responses by managers in the highest payout quartile for 1981 of

82

BAKER, FARRELLY, EDELMAN/A SURVEY ON DIVIDEND POLICY

nonregulated firms (51 firms) were compared with the utilities (114 firms).4

With a few exceptions, the results were strikingly similar to those in Exhibit 2. Although the mean rank- ings changed little, the responses of the higher payout nonregulated firms more closely resembled the utilities on two statements - namely, dividend payout affects the price of the common stock (Si) and management should be responsive to its shareholders' dividend preferences (S6).

Overall, the findings suggest that the attitudes of even high-payout nonregulated firm managers are dif- ferent from those of utility managers. Hence, regula- tion may be responsible for some of the relations ob- served.

IV. Conclusions Before drawing any conclusions, several limiting

aspects of this research should be noted. Survey re- search typically involves some non-response bias and although steps were taken to ensure a high response rate, this study is no exception. The problem of non- response bias is potentially greatest among manufac- turing firms which had the lowest response rate. An- other limiting factor is that views about dividend policy were obtained only from chief financial offi- cers. Although CFOs' views should reflect the atti- tudes of top management more generally, CFOs are not the only individuals involved in dividend policy decisions. Finally, coverage is restricted to three broad industry groups representing only New York Stock Exchange firms.

With these caveats in mind, several conclusions emerge from this survey. First, the results show that the major determinants of dividend payments today appear strikingly similar to Lintner's behavioral model developed during the mid-1950's. In particular, re- spondents were highly concerned with dividend con- tinuity.

Second, the respondents seem to believe that divi- dend policy affects share value, as evidenced by the importance attached to dividend policy in maintaining or increasing stock price. Although the survey does not uncover the exact reasons for their belief in dividend relevance, it does provide evidence that the respon- dents are generally aware of signaling and clientele effects.

Finally, the opinions of the respondents from the utilities differ markedly from those of the other two

4Summary statistics of high payout regulated and nonregulated firms are available from the authors.

industries. The results suggest that managers of regu- lated firms have a somewhat different view of the world than managers operating in a competitive envi- ronment. Thus, it may be worthwhile to segregate reg- ulated from nonregulated firms when examining divi- dend policy.

References 1. P. Asquith and D. Mullins, Jr., "The Impact of Initiating

Dividend Payments on Shareholders' Wealth," Journal of Business (January 1983), pp. 77-96.

2. F. Black, "The Dividend Puzzle," Journal of Portfolio Management (Winter 1976), pp. 5-8.

3. T. E. Copeland and J. F. Weston, Financial Theory and

Corporate Policy, Reading, MA, Addison-Wesley, 1983. 4. P. J. Dhrymes and M. Kurz, "Investment, Dividend, and

External Finance Behavior of Firms," in R. Ferber (ed.), Determinants of Investment Behavior, New York, Colum- bia University Press, 1967, pp. 427-467.

5. K. M. Eades, "Empirical Evidence on Dividends as a Sig- nal of Firm Value," Journal of Financial and Quantitative Analysis (November 1982), pp. 471-500.

6. R. B. Edelman, G. E. Farrelly, and H. K. Baker, "Public

Utility Dividend Policy: Time for a Change?", Public Utili- ties Fortnightly (February 21, 1985), pp. 26-31.

7. E. J. Elton and M. J. Gruber, "Marginal Stockholder Tax Rates and the Clientele Effect," Review of Economics and Statistics (February 1970), pp. 68-74.

8. E. F. Fama and H. Babiak, "Dividend Policy: An Empiri- cal Analysis," Journal of the American Statistical Associ- ation (December 1968), pp. 1132-1161.

9. C. Kwan, "Efficient Market Tests of the Informational Content of Dividend Announcements: Critique and Exten- sion," Journal of Financial and Quantitative Analysis (June 1981), pp. 193-206.

10. P. M. Laub, "On the Informational Content of Dividends," Journal of Business (January 1976), pp. 73-80.

11. J. Lintner, "Distribution of Incomes of Corporations Among Dividends, Retained Earnings and Taxes," Ameri- can Economic Review (May 1956), pp. 97-113.

12. R. H. Litzenberger and K. Ramaswamy, "The Effect of Personal Taxes and Dividends on Capital Asset Prices:

Theory and Empirical Evidence," Journal of Financial Economics (June 1979), pp. 163-196.

13. G. M. McCabe, "The Empirical Relationship Between In- vestment and Financing: A New Look," Journal of Finan- cial and Quantitative Analysis (March 1979), pp. 119-135.

14. A. Michel, "Industry Influence on Dividend Policy," Fi- nancial Management (Autumn 1979), pp. 22-26.

15. M. H. Miller and F. Modigliani, "Dividend Policy, Growth, and the Valuation of Shares," Journal of Business (October 1961), pp. 411-433.

16. S. H. Penman, "The Predictive Content of Earnings Fore- casts and Dividends," Journal of Finance (September 1983), pp. 1181-1199.

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FINANCIAL MANAGEMENT/AUTUMN 1985

17. R. R. Pettit, "Taxes, Transactions Costs and Clientele Ef- fects of Dividends," Journal of Financial Economics (De- cember 1977), pp. 419-436.

18. M. S. Rozeff, "Growth, Beta and Agency Costs as Deter- minants of Dividend Payout Ratios," Journal of Financial Research (Fall 1982), pp. 249-259.

19. J. C. Van Home, Financial Management and Policy, 6th

ed., Englewood Cliffs, NJ, Prentice-Hall, 1983. 20. J. F. Weston and E. F. Brigham, Managerial Finance, 7th

ed., Hinsdale, IL, Dryden Press, 1981. 21. J. R. Woolridge, "The Information Content of Dividend

Changes," Journal of Financial Research (Fall 1982), pp. 237-247.

NEW YORK SOCIETY OF SECURITY ANALYSTS SPECIAL ANNOUNCEMENT

The New York Society of Security Analysts Inc. is now sponsoring a Faculty Resource Program. This

program is designed to match the expertise and interests of university faculty members on sabbatical or other leave with financial institutions needing expert assistance in special research projects, in-house training programs or other activities.

The New York Society is currently developing a national roster of faculty members who will be available for periods of several months to a year or more. There is no charge to faculty for listing with this program nor to institutions for using the program to identify consultants. Financial arrangements between institutions and individuals are the responsibility of the parties involved.

Faculty or institutions interested in the New York Society's Faculty Resource Program should contact: Professor Fred Renwick

Department of Finance New York University Graduate School of Business 100 Trinity Place New York, NY 10006

84