The Shareholder Base and Payout Policy Andriy Bodnaruka y Per Östbergb z

This paper documents a relationship between the shareholder base and payout policy. We nd that \u85rms with small shareholder bases have lower payout levels and maintain higher cash holdings than \u85rms with large shareholder bases. These \u85ndings suggest that small shareholder base rms have higher costs of external \u85nancing. Consistent with this argument, \u85 rms with small shareholder bases are less likely to undertake a repurchase (reduce the shareholder base even further) and are more likely to pay special dividends. JEL classification: G35, G14, G15