Expectations Investing

see, the preferred method depends on several conditions, most notably

taxes and the stock-price-to-expected-value relationship.

That said,dividends are in clear demise.For example,although two-

thirds of U.S. companies paid a dividend in 1978, only about one-fifth

did so in the late 1990s.

15

Since the mid-1980s,a majority of firms have

chosen to initiate cash payments to their shareholders through share

buybacks rather than through dividends. And while many large, estab-

lished firms have not cut their dividends, evidence shows that they are

financing their share-buyback programs with funds that they otherwise

would have used to boost dividends.

As an expectations ...