Dividend reductions have long been considered a "last resort" action for firm managers. Managerial reluctance to reduce … dividends emanates from the view that dividend drops signal managerial pessimism regarding future earnings. Contrary to … expectations, studies show that earnings rebound significantly following a dividend reduction; yet investors react negatively to …

We analyze a firm's choice between dividend payments and stock repurchases under heterogeneous beliefs and the … of its equity, choose between paying out its cash available through a dividend payment or a stock repurchase, as well as …. Finally, we develop a number of new results characterizing a firm's long-run stock returns following dividend payments and …

infrequent stock dividend distributors have higher post-distribution operating performance relative to frequent distributors. We … also find that the illiquidity measure is significantly related to the announcement effect only for frequent stock dividend …

In this paper, we derive an intertemporal dividend-surprise-augmented asset-pricing model and show that the expected … risk premium compensates for stock returns’ exposure to (i) the market-wide dividend-surprise hedge portfolio based on … dividend yield surprise and volatilities, in addition to (ii) the excess market return without dividend yield (as in the …

This paper attempts to explain the effect of dividend payment and retained earnings on market price of share in the … more than the dividend effect given investment opportunities. A study of Indian evidence shows that their stock market has … Nepal and finds only limited support for it. The results indicate the customary strong dividend and very weak retained …

This study tests the signaling theory of dividends by investigating the stock price reaction to dividend announcements … results indicate significant abnormal stock returns are associated with announcements of dividend changes. The results are … robust to alternative models of dividend expectations, after controlling for the impact of earnings announcements, and are …

We examine the interaction of dividends, agency costs and taxes on SEO valuations using the 2003 dividend tax cut as a … natural experiment. We find the difference in SEO announcement-day returns between dividend- and non-dividend-paying firms … disappears after the tax cut evidencing dividend status dependent revaluations. Incorporation of agency costs reveals the …

numerous empirical studies. Observations carried out in developed markets show that dividend initiation decisions result in an … increase of abnormal returns. The main objective of this paper is to present results of shareholders' reaction to dividend …. In the case of over 45% of dividend initiations the reaction was negative. Moreover, the author have indicated that …

cross-section, we show that both dividend levels and changes contain more earnings information among firms with weaker … information through their dividend changes. We show that for firms with strong investment opportunities, because funding … dividend payout …