Brandon - Reappearing dividends

Dividend Puzzle: Fisher Black: no convincing explanation for the practice of paying dividends.
2 premises:
M&M: value defined by earning power. One dollar in dividends one less capital gains
Tax disadvantage.

Explaination: Easterbrook: increase investor influence. Discipline corporate management, Jensen (1986) --> agency cost. Control to avoid low return investment, overinvestment.

Dividends and Stock repurchases.