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Ownership structure and corporate dividend policy Verma, Savita


This study investigates the potential role of ownership structure as a determinant of the corporate dividend policy. A firm's dividend policy is modelled as the outcome of a voting game among groups of asymmetrically informed shareholders, who also have different marginal tax rates for dividend income. The outcome of the voting game is determined by the relative voting powers of these shareholder groups. Voting power is denned as the probability that a particular block of shares will be pivotal in determining the outcome of the voting game. Using Shapley values as instruments for shareholder groups' voting powers, data on firms which traded on the Toronto Stock Exchange during the 1976-88 period are employed to test the model's predictions.

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