Message Font: Serif | Sans-Serif
 
No. of Recommendations: 0
Author: FractalWalk Date: 12/15/00 2:26 PM Number: 39099
Lifted from a recent post by Snoop:

" . . . it is not possible to demonstrate that the expected returns on high yield common stocks differ from the expected returns on low yield common stocks either before or after taxes." -- Black, F., and M. Scholes, 1974, "The effects of dividend yield and dividend policy on common stock prices and returns, Journal of Financial Economics 1, 1-22.

The Nobel prize commitee thought they were credible.


I have a lot of respect for Black and Scholes, and they are certainly credible. The Black-Scholes Option Model is famous, and that is what they won the Nobel prize for. In fact, one of the books I own is 'Black-Scholes and Beyond', and they write estensively about statistical analysis of the stock market.

However, I was unaware that Black and Scholes ever analyzed the effects of dividends on appreciation of large cap stocks, even though this is certainly not what they won the Nobel Prize for. I would like to read the referenced paper, but have been unable to find it anywhere.

Russ
Print the post  

Announcements

What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Community Home
Speak Your Mind, Start Your Blog, Rate Your Stocks

Community Team Fools - who are those TMF's?
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.
Advertisement