The fact that payouts are not simply

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The Argentina scenario is a harsh reminder that attempts to improve the international financial architecture without addressing the underlying weaknesses and distortions of a debtor nation are simply counterproductive. Rather than stifling investment the proposed change will hopefully trigger increased focus on equity type investments on entrepreneurial activities that actually produce products and services to attract investors and it will shine a positive light on an emerging economy.

With these actions developing countries may concentrate more on the economic building blocks APR WORKING PAPER SUMMARIES Payout Policy by Joan Farre Mensa Roni Michaely and Martin C. Schmalz Payout policy is at the core of many key questions in corporate finance. In a world in which financial markets are not frictionless how much firms pay out and which vehicle they choose to distribute cash to their shareholders may affect their valuation has a potential impact on how much taxes investors Chinese Overseas America Number Data pay may affect management s investment decisions and may inform the market about how good the firm is relative to its peers. In this paper the authors review the academic literature on payout policy with a particular emphasis on developments in the past two decades. Scholarship on payout policy has made significant advancements in the last years and we now know much more about the importance of taxes agency and signaling motives for payout policy.





A Perhaps the most important change in corporate payout policy in the last two decades has been the secular increase of stock repurchases and the apparent triumph of buybacks over dividends as the dominant form of corporate payouts. Looking at the bigger picture the authors observe that until recently most scholarship has analyzed payout policy in isolation. An important recent development in the payout literature has been to consider the interaction between payout and other corporate policies such as compensation or investment.  residual free cash flows underlines the importance of taking seriously the interdependence of financing investment and payout decisions.