On the Motivation for Paying Scrip Dividends

Meziane Lasfer

Financial Management, 1997, vol. 26, issue 1

Abstract: Firms in the United Kingdom that pay scrip (i.e., in stock) dividends do not appear to be following optimal dividend policies. Scrip dividends are not driven by tax considerations or cash shortages. The payment of scrip dividends exacerbates the agency costs of free cash flow.

Date: 1997
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