Dividend Policies and Stock Buyback Restrictions
Some countries do not allow firms to buy back stock from their stockholders. Which of the following would you expect of dividend policies in these countries (relative to countries that don't restrict stock buybacks)?
Higher portion of earnings will be paid out in dividends; more volatile dividends Lower portion of earnings will be paid out in dividends; more volatile dividends Higher portion of earnings will be paid out in dividends; less volatile dividends Lower portion of earnings will be paid out in dividends; less volatile dividends Explain.