Does Opaqueness Make Equity Capital Expensive for Banks?

Bank managers often claim that equity is expensive, which contradicts the Modigliani-Miller irrelevance theorem. An opaque bank must signal its solvency by paying high and stable dividends in order to keep depositors tranquil. This signalling may require costly liquidations if the return on assets h...

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Fecha de publicación:: 2014

Institución:: Universidad del Rosario

Repositorio:: Repositorio EdocUR - U. Rosario

Idioma:: spa

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spelling	fba92005-b028-4370-8773-0ca06d9d6387-12018-03-07T13:43:31Z2018-03-07T13:43:31Z2014-12-012014Bank managers often claim that equity is expensive, which contradicts the Modigliani-Miller irrelevance theorem. An opaque bank must signal its solvency by paying high and stable dividends in order to keep depositors tranquil. This signalling may require costly liquidations if the return on assets has been poor, but not paying the dividend might trigger a run. A strongly capitalized bank should keep substantial amounts of risk-free yet non-productive currency because the number of shares is high, which is costly. The dividend is informative of the state of the bank; rational depositors react to it.application/pdfhttps://revistas.urosario.edu.co/index.php/economia/article/view/374410.12804/rev.econ.rosario.17.02.2014.01http://repository.urosario.edu.co/handle/10336/15533spaUniversidad del Rosariohttps://revistas.urosario.edu.co/index.php/economia/article/view/3744/2698Copyright (c) 2015 Revista de Economía del RosarioAbierto (Texto completo)http://creativecommons.org/licenses/by-nc/4.0http://purl.org/coar/access_right/c_abf2Revista de Economía del Rosario; Vol. 17, Núm. 02 (2014): julio-diciembre; 203-2272145-454X0123-536210.12804/rev.econ.rosario.17.02.2014instname:Universidad del Rosarioreponame:Repositorio Institucional EdocURdividendsbank capitalirrelevance theoremDoes Opaqueness Make Equity Capital Expensive for Banks?articleArtículohttp://purl.org/coar/version/c_970fb48d4fbd8a85http://purl.org/coar/resource_type/c_6501Kauko, Karlo10336/15533oai:repository.urosario.edu.co:10336/155332021-06-03 00:48:35.851http://creativecommons.org/licenses/by-nc/4.0Copyright (c) 2015 Revista de Economía del Rosariohttps://repository.urosario.edu.coRepositorio institucional EdocURedocur@urosario.edu.co
dc.title.spa.fl_str_mv	Does Opaqueness Make Equity Capital Expensive for Banks?
title	Does Opaqueness Make Equity Capital Expensive for Banks?
spellingShingle	Does Opaqueness Make Equity Capital Expensive for Banks? dividends bank capital irrelevance theorem
title_short	Does Opaqueness Make Equity Capital Expensive for Banks?
title_full	Does Opaqueness Make Equity Capital Expensive for Banks?
title_fullStr	Does Opaqueness Make Equity Capital Expensive for Banks?
title_full_unstemmed	Does Opaqueness Make Equity Capital Expensive for Banks?
title_sort	Does Opaqueness Make Equity Capital Expensive for Banks?
dc.subject.spa.fl_str_mv	dividends bank capital irrelevance theorem
topic	dividends bank capital irrelevance theorem
description	Bank managers often claim that equity is expensive, which contradicts the Modigliani-Miller irrelevance theorem. An opaque bank must signal its solvency by paying high and stable dividends in order to keep depositors tranquil. This signalling may require costly liquidations if the return on assets has been poor, but not paying the dividend might trigger a run. A strongly capitalized bank should keep substantial amounts of risk-free yet non-productive currency because the number of shares is high, which is costly. The dividend is informative of the state of the bank; rational depositors react to it.
publishDate	2014
dc.date.created.none.fl_str_mv	2014-12-01
dc.date.issued.none.fl_str_mv	2014
dc.date.accessioned.none.fl_str_mv	2018-03-07T13:43:31Z
dc.date.available.none.fl_str_mv	2018-03-07T13:43:31Z
dc.type.eng.fl_str_mv	article
dc.type.coarversion.fl_str_mv	http://purl.org/coar/version/c_970fb48d4fbd8a85
dc.type.coar.fl_str_mv	http://purl.org/coar/resource_type/c_6501
dc.type.spa.spa.fl_str_mv	Artículo
dc.identifier.none.fl_str_mv	https://revistas.urosario.edu.co/index.php/economia/article/view/3744 10.12804/rev.econ.rosario.17.02.2014.01
dc.identifier.uri.none.fl_str_mv	http://repository.urosario.edu.co/handle/10336/15533
url	https://revistas.urosario.edu.co/index.php/economia/article/view/3744 http://repository.urosario.edu.co/handle/10336/15533
identifier_str_mv	10.12804/rev.econ.rosario.17.02.2014.01
dc.language.iso.none.fl_str_mv	spa
language	spa
dc.relation.uri.none.fl_str_mv	https://revistas.urosario.edu.co/index.php/economia/article/view/3744/2698
dc.rights.spa.fl_str_mv	Copyright (c) 2015 Revista de Economía del Rosario
dc.rights.coar.fl_str_mv	http://purl.org/coar/access_right/c_abf2
dc.rights.acceso.spa.fl_str_mv	Abierto (Texto completo)
dc.rights.uri.none.fl_str_mv	http://creativecommons.org/licenses/by-nc/4.0
rights_invalid_str_mv	Copyright (c) 2015 Revista de Economía del Rosario Abierto (Texto completo) http://creativecommons.org/licenses/by-nc/4.0 http://purl.org/coar/access_right/c_abf2
dc.format.mimetype.none.fl_str_mv	application/pdf
dc.publisher.spa.fl_str_mv	Universidad del Rosario
dc.source.spa.fl_str_mv	Revista de Economía del Rosario; Vol. 17, Núm. 02 (2014): julio-diciembre; 203-227 2145-454X 0123-5362 10.12804/rev.econ.rosario.17.02.2014
institution	Universidad del Rosario
dc.source.instname.none.fl_str_mv	instname:Universidad del Rosario
dc.source.reponame.none.fl_str_mv	reponame:Repositorio Institucional EdocUR
repository.name.fl_str_mv	Repositorio institucional EdocUR
repository.mail.fl_str_mv	edocur@urosario.edu.co
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Does Opaqueness Make Equity Capital Expensive for Banks?

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