A New Piece to the "Dividend Puzzle": Low Payout Ratio Policies, Strategies of Private Benefit Extraction and Company Value
Bruna Ecchia

Abstract
The logic of the Modigliani-Miller model on the "zero influence" of dividend policy on company value must be integrated into real markets with the inclusion of context factors and the psychological weight assigned to it by investors. Minority investors, when small, with low cognitive capacity and high risk aversion, are oriented "a priori" to prefer the dividend to uncertain increases in the value of the shares linked to profit reinvestment, so that any choices in the opposite direction of the majority, frequent in companies with concentrated ownership, give rise to a penalization of the market price, despite the fact that the dividend policy itself does not actually lead to discrimination against the minority. What alters the condition of equal share rights, but only in concentrated-owned companies, is the extraction of private benefits by the command group, which determines a corresponding reduction in the return of minority shareholders, as well as harming the enterprise. This extraction takes place independently of the dividend policy but is certainly favored by a systematic and massive reinvestment of profits, which, by reducing the weight of recourse to external lenders and therefore their interest in particularly assiduous and penetrating controls over the enterprise, indirectly increases the freedom of the agent to extract private benefits. It is doubtful whether the share market price incorporates the indirect effects of a profit reinvestment strategy as a shield for the agent's opportunistic maneuvers. Even the doctrinal debate on the "dividend puzzle" seems to ignore this aspect, and this paper wants to help fill this gap.

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