1984
DOI: 10.1111/j.1475-6803.1984.tb00362.x
|View full text |Cite
|
Sign up to set email alerts
|

An Examination of Market Reaction to Substantial Shifts in Dividend Policy

Abstract: This study provides further empirical evidence on the informational content of dividends hypothesis. To reduce the misclassification of unfavorable and favorable dividend announcements, which can result when small dividend changes are included, the analysis is restricted to cases where a substantial shift in dividend policy has occurred. Specifically, the authors examine the aggregate market response to announcements of (1) omitted dividends, (2) dividend decreases of at least 2S percent, (3) dividend increase… Show more

Help me understand this report

Search citation statements

Order By: Relevance

Paper Sections

Select...
3
1
1

Citation Types

3
13
0

Year Published

1993
1993
2019
2019

Publication Types

Select...
8
1
1

Relationship

0
10

Authors

Journals

citations
Cited by 43 publications
(16 citation statements)
references
References 22 publications
3
13
0
Order By: Relevance
“…Pettit (1972Pettit ( , 1976 found evidence that dividend change announcements convey information to the market. Similar results were obtained by several authors, such as Aharony and Swary (1980), Benesh et al (1984) and Dhillon and Johnson (1994) for dividend change announcements, Asquith and Mullins (1983) for…”
Section: Introductionsupporting
confidence: 90%
“…Pettit (1972Pettit ( , 1976 found evidence that dividend change announcements convey information to the market. Similar results were obtained by several authors, such as Aharony and Swary (1980), Benesh et al (1984) and Dhillon and Johnson (1994) for dividend change announcements, Asquith and Mullins (1983) for…”
Section: Introductionsupporting
confidence: 90%
“…There is evidence that dividend-increasing companies earn positive abnormal returns while their dividend-decreasing counterparts earn negative abnormal returns; the results suggest that the negative reaction to bad news is fairly strong and relatively robust (for U.S. evidence see Pettit, 1972;Charest, 1978;Aharony and Swary, 1980;Woolridge, 1982;Asquith and Mullins, 1983;Brickley, 1983;Divecha and Morse, 1983;Benesh et al, 1984;Dielman and Oppenheimer, 1984;Eades et al, 1985;Wansley and Lane, 1987;Ghosh and Woolridge, 1988;Aharony et al, 1988;Healey and Palepu, 1988;and Ghosh and Woolridge, 1991; and for U.K. evidence see, Marsh, 1993;. If the expectations of market participants observed in these studies are correct, then dividend-increasing companies will achieve a superior post-announcement performance compared with their dividend-decreasing counterparts.…”
Section: Introductionmentioning
confidence: 92%
“…Asquith and Mullins [2] included only the "largest" dividend change occurring during a three-year period after dividend initiations. Benesh, Keown, and Pinkerton [3] used two criteria for inclusion in their dividend change samples. The dividend change must have been at least ten cents or a change of at least 25 percent.…”
Section: Motivation For the Studymentioning
confidence: 99%