POLITICAL COSTS HYPOTHESIS Definition

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POLITICAL COSTS HYPOTHESIS predicts that firms with low agency and political costs and effective shareholders monitoring will distribute cash dividend and those with moderate agency and political costs may use stock dividends in lieu of cash dividends to separate themselves from firms having high agency and political costs. This indicates that cash dividend firms will face better long-term stock market valuation of their shares than stock dividend firms.

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DOCUMENT is the written or printed paper that bears information that can be used to furnish decisive evidence. Could also be a recording, computer readable information, or a photograph.

PROBABLE an event happening is probable if it is uncertain but likely to happen.

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