Do Dividend Clienteles Exist?
Author InfoJOHN R. GRAHAM ALOK KUMAR Abstract We study stock holdings and trading behavior of more than 60,000 households and find evidence consistent with dividend clienteles. Retail investor stock holdings indicate a preference for dividend yield that increases with age and decreases with income, consistent with age and tax clienteles, respectively. Trading patterns reinforce this evidence: Older, low-income investors disproportionally purchase stocks before the ex-dividend day. Furthermore, among small stocks, the ex-day price drop decreases with age and increases with income, consistent with clientele effects. Finally, consistent with the behavioral “attention” hypothesis, we document that older and low-income investors purchase stocks following dividend announcements. Copyright 2006 by The American Finance Association. Download InfoTo download: If you experience problems downloading a file, check if you have the proper application to view it first. Information about this may be co
