U.S. stock prices and the dot.com-bubble: Can dividend policy rescue the efficient market hypothesis?

This paper thoroughly integrates speculative bubbles to corporate finance literature by focusing on dividend policy issues. More specifically, we examine the importance of when testing for in S&P 500 equity index a data set spanning 1871 2014. Given phenomenon smoothing, particular U.S., question usefulness observed payments as fundamental factor bubbles. Circumventing construct hypothetical payouts which are based reported earnings instead. The empirical evidence presented here indeed suggests that firms affects While dot.com-bubble—commonly seen prime example stock price bubble not only NASDAQ but also other, broader indices—is detected with series factor, this is necessarily case our adjusted time series. Some results argue against U.S. market late 1990s.