scholarly journals The cash-flow permanence and information content of dividend increases versus repurchases

2000 ◽  
Vol 57 (3) ◽  
pp. 385-415 ◽  
Author(s):  
W Guay
Keyword(s):  
Information Content ◽  
Cash Flow ◽  
Dividend Increases

Information Content of Dividends: Evidence from Istanbul

2010 ◽  
Vol 3 (3) ◽  
pp. 126 ◽  
Author(s):  
Ayse Altiok-Yilmaz ◽  
Elif Akben Selcuk
Keyword(s):  
Information Content ◽  
Event Study ◽  
Stock Exchange ◽  
Information Leakage ◽  
Istanbul Stock Exchange ◽  
Event Information ◽  
Study Methodology ◽  
Dividend Increases ◽  
Signaling Hypothesis ◽  
Event Study Methodology

This study investigates the market reaction to dividend change announcements at the Istanbul Stock Exchange. A sample of 184 announcements made by 46 companies during the period 2005 to 2008 is analyzed by using the event study methodology. The results suggest that the market reacts positively to dividend increases, negatively to dividend decreases and does not react when dividends are not changed, consistent with the signaling hypothesis. Also, the results show pre-event information leakage for the decreasing dividends sample.

Dividend Changes as Predictors of Future Profitability

2021 ◽  
Vol 15 (1) ◽  
Author(s):  
Fakhrul Hasan
Keyword(s):  
Information Content ◽  
Stock Prices ◽  
Special Interest ◽  
Dividend Policy ◽  
Future Earnings ◽  
New Information ◽  
Dividend Increases ◽  
Using Data ◽  
The Uk ◽  
Dividend Tax

This study investigates “the information content of dividends hypothesis” using data on UK firms from 1990-2015. Dividends act as an important conveyor of information. Dividend changes may trigger changes in stock prices because they may convey new information about the firm’s future earnings and profitability. Why do companies pay dividends (or analogously why are stockholders interested in receiving dividends), given that it is well known that dividends are often taxed heavily? This question is of special interest in the UK, where the dividend tax is higher than the capital gain tax. Previous research has used a number of dividend policy theories to explain the dividend policy puzzle. We carry out several estimations and find out that contrary to some other studies, there is no evidence that dividend increases (decreases) provide information about the future profitability or earnings of UK firms.

An Examination of the Free Cash Flow and Information/Signaling Hypotheses Using Unexpected Dividend Changes Inferred from Option and Stock Prices: The Case of Regular Dividend Increases

2011 ◽  
Vol 14 (03) ◽  
pp. 563-600 ◽  
Author(s):  
Sheng-Syan Chen ◽  
Kuei-Chin Fu
Keyword(s):  
Research And Development ◽  
Cash Flow ◽  
Stock Prices ◽  
Abnormal Returns ◽  
Positive Association ◽  
Free Cash Flow ◽  
High Q ◽  
Information Signaling ◽  
Dividend Increases ◽  
Free Cash Flow Hypothesis

This paper measures unexpected dividend changes in testing the free cash flow and information/signaling hypotheses using the Bar–Yosef/Sarig method. The empirical findings reveal the following: (i) The association between announcement period abnormal returns and the cash level is significantly positive for low q firms; (ii) The positive association between announcement period, abnormal returns, and the cash level is stronger in low q than in high q firms for most regressions; (iii) Low q firms reduce their capital and research and development (R&D) expenditures during the four fiscal years following dividend increase announcements. Our results are consistent with the free cash flow hypothesis.

scholarly journals The Declining Information Content of Dividend Announcements and the Effects of Institutional Holdings

2006 ◽  
Vol 41 (3) ◽  
pp. 637-660 ◽  
Author(s):  
Yakov Amihud ◽  
Kefei Li
Keyword(s):  
Information Content ◽  
Institutional Investors ◽  
Institutional Holdings ◽  
Costly Signal ◽  
Dividend Announcements ◽  
Dividend Increases

AbstractWe propose an explanation for the “disappearing dividend” phenomenon: a decline in the information content of dividend announcements, which reduces the propensity of firms to use dividends as a costly signal. A reason for a decline in the information content of dividends is the rise in holdings by institutional investors that are more sophisticated and informed. Indeed, we find a decline in CAR at dividend change announcements since the mid–1970s. Across firms, CAR is a decreasing function of institutional holdings. Institutional investors exploit their superior information and buy before dividend increases. In addition, dividends are less likely to rise in firms with high institutional holdings.

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