Behavioural Aspects of the Demand for Dividend-Paying Stocks

The demand for dividend-paying stocks by individual investors remain an enigma to financial economists. Studies of asset prices have failed to resolve the puzzle. This study presents new evidence on dividend receipts, equity holdings, and portfolio dividend yields from a survey of six thousand American households. The evidence confirms the existence of a puzzle on the level of the individual investor and suggests that the explanation lies in important behavioral aspects to the demand for dividend-paying stocks.

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