What’s Really Wrong With U.S. Business Schools?

A research paper entitled “What’s Really Wrong with U.S. Business Schools” shines a light on what has become a growing dilemma for business school deans-the yearly scorecard that assigns numerical rankings to selected business programs. The paper describes a “dysfunctional competition for media rankings that leads schools to divert resources from investment in knowledge creation and other important areas to short-term strategy aimed at improving … [ Read more ]

Dividend Policy, Agency Costs, and Earned Equity

In a well done and interesting work, DeAngelo, DeAngelo, and Stulz tie dividend policy and agency costs (particularly the free cash flow problem) together. Their main point is that if firms did not pay dividends, managers would have too much cash at their disposal.

The authors begin by asking the question “why do firms pay dividends.” To answer the question they examine what would happen if … [ Read more ]