We consider a discrete-time dependent Sparre Andersen risk model which incorporates multiple threshold levels characterizing an insurer’s minimal capital requirement, dividend paying situations, and external financial activities. We focus on the development of a recursive computational procedure to calculate the finite-time ruin probabilities and expected total discounted dividends paid prior t...

This paper presents a dynamic asset-pricing model under asymmetric information. Investors have different information concerning the future growth rate of dividends. They rationally extract information from prices as well as dividends and maximize their expected utility. The model has a closed-form solution to the rational expectations equilibrium. We find that existence of uninformed investors ...

Using 1988 and 1991 data from nonprofit voluntary hospitals in California, we find that the vast majority of nonprofit hospitals provide community dividends in excess of the tax subsidies they receive. However, nearly 20 percent of nonprofit hospitals do not meet this standard. Further, those hospitals that do not meet the standard tend to not meet the standard over time. We recommend more expl...

This paper deals with optimal investment and redistribution of the free reserves connected to life and pension insurance contracts in form of dividends and bonus. Formulated appropriately this problem can be viewed as a modification of Merton’s problem of optimal consumption and investment with a very particular form of consumption and utility hereof. Both are linked to a finite state Markov ch...

Out of their after-tax profits, corporations pay dividends and often repurchase shares to generate capital gains for their shareholders. Capital gains typically attract lower effective rates of tax than dividends, which leads to the payout puzzle: Why do corporations continue to pay dividends in spite of their relative tax disadvantage? This paper develops a model of corporate payout policy to ...

We use the staggered adoption of Universal Demand (UD) laws, which significantly reduces shareholder litigation rights listed banks incorporated in 23 US states during period from 1989 to 2005, as a quasi-natural experiment examine impact on bank dividends. The results difference-in-difference analysis show that weakened lead an increase Further, we find UD laws is only evident for with greater...