Download or read book Dividend Behavior and Dividend Signaling written by Richard Priestley and published by . This book was released on 2000 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: We analyze the dividend behavior of the aggregate stock market. We propose a model that assumes managers minimize the costs of adjustment associated with being away from their target dividend payout. The target is expressed as a function of lagged stock prices and permanent earnings, generalizing previous models of dividend behavior. We present a new method for measuring unobserved permanent earnings based on the Kalman filter. Our specification of dividend behavior is strongly supported by the data relative to both alternative models and over time. We find significant evidence of dividend smoothing and dividends conveying information regarding unexpected positive changes in current permanent earnings. We also find that both the speed of adjustment of dividends to target dividends and tests of signaling are sensitive to the specification of the model.

Download or read book Information Environment Dividend Changes and Signaling written by Raj Aggarwal and published by . This book was released on 2016 with total page 47 pages. Available in PDF, EPUB and Kindle. Book excerpt: While theory suggests that dividends can be an important signal for firm performance, prior studies have been unable to provide strong evidence of dividend signaling among publicly listed U.S. companies. One potential explanation for this inconsistency between theory and empirical evidence is that the cross-sectional variation in information asymmetry across U.S. firms is insufficient to provide adequate test power. In this study, we revisit the link between dividend signaling and firms' information environment by examining the dividend behavior of foreign firms that cross-list on the U.S. stock market in the form of American Depository Receipts (ADRs). Our evidence suggests that ADR firms with poorer information environments have stronger incentives to adopt dividend increases as a signaling device. We also find that such firms experience an increase in one-year-ahead earnings and a decline in systematic risk following a dividend increase. Additional analysis shows that ADR firms have fewer other information channels compared to similar U.S. firms. Overall, we provide evidence consistent with the importance of dividend signaling, especially for firms with poorer information environments.

Download or read book Dividend Behavior for the Aggregate Stock Market written by Terry A. Marsh and published by . This book was released on 1985 with total page 70 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Dividend Policy and Behavior in Emerging Markets written by Jack D. Glen and published by World Bank Publications. This book was released on 1995 with total page 40 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Dividends as Reference Points written by Malcolm Baker and published by . This book was released on 2012 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: We outline a dividend signaling approach in which rational managers signal firm strength to investors who are loss averse to reductions in dividends relative to the reference point set by prior dividends. Managers with strong but unobservable cash earnings separate themselves by paying high dividends but retain enough earnings to be likely not to fall short of the same level next period. The model is consistent with several features of the data, including equilibrium dividend policies similar to a Lintner partial-adjustment model; modal dividend changes of zero; stronger market reactions to dividend cuts than increases; relative infrequency and irregularity of repurchases versus dividends; and a core mechanism that does not center on public destruction of value, a notion that managers reject in surveys. Supportive new tests involve nominal levels and changes of dividends per share, announcement effects, and reference point currencies of ADR dividends.

Download or read book Dividend Policy written by George Frankfurter and published by Elsevier. This book was released on 2003-06-24 with total page 249 pages. Available in PDF, EPUB and Kindle. Book excerpt: Dividend Policy provides a comprehensive study of dividend policy. It explores the puzzle presented by dividends: irrational and subject to fashion, yet popular and desirable, they remain a priority among managers, even while perceived as largely symbolic. After exploring the history of dividend payments, from the emergence of the modern corporation to current perspectives, it traces the evolution of academic models on dividend policy. Here the authors review models of symmetric and asymmetric information before analyzing academia's accomplishments in solving the dividend puzzle. Related subjects, such as valuation and wealth distribution, round out the authors' presentation about new ways to think about one of the most intriguing subjects in financial economics. The book is recommended for professors and students in departments of finance and business, corporate finance staff, and financial regulators. The only comprehensive study of dividend policy Covers the historical evolution of dividends and academic research on dividend policy Presents new ways of thinking about dividends and dividend policy

Download or read book Dividends as Reference Points written by Malcolm P. Baker and published by . This book was released on 2017 with total page 42 pages. Available in PDF, EPUB and Kindle. Book excerpt: We outline a dividend signaling model that features investors who are averse to dividend cuts. Managers with strong unobservable cash earnings pay high dividends but retain enough to be likely not to fall short next period. The model is consistent with a Lintner partial-adjustment model, modal dividend changes of zero, stronger market reactions to dividend cuts than increases, comparatively infrequent and irregular repurchases, and a mechanism that does not depend on public destruction of value, which managers reject in surveys. New tests involve stronger reactions to changes from longer-maintained dividend levels and reference point currencies of American Depository Receipt dividends.

Download or read book Dividend Policy and Corporate Governance written by Luis Correia da Silva and published by Oxford University Press, USA. This book was released on 2004-02-26 with total page 200 pages. Available in PDF, EPUB and Kindle. Book excerpt: An analysis of the extent to which dividend payout policy differs from country to country. In particular the authors investigate the differences between the UK market-oriented and the German blockholder-oriented systems.

Download or read book Dividends and Dividend Policy written by H. Kent Baker and published by John Wiley & Sons. This book was released on 2009-05-04 with total page 552 pages. Available in PDF, EPUB and Kindle. Book excerpt: Dividends And Dividend Policy As part of the Robert W. Kolb Series in Finance, Dividends and Dividend Policy aims to be the essential guide to dividends and their impact on shareholder value. Issues concerning dividends and dividend policy have always posed challenges to both academics and professionals. While all the pieces to the dividend puzzle may not be in place yet, the information found here can help you gain a firm understanding of this dynamic discipline. Comprising twenty-eight chapters—contributed by both top academics and financial experts in the field—this well-rounded resource discusses everything from corporate dividend decisions to the role behavioral finance plays in dividend policy. Along the way, you'll gain valuable insights into the history, trends, and determinants of dividends and dividend policy, and discover the different approaches firms are taking when it comes to dividends. Whether you're a seasoned financial professional or just beginning your journey in the world of finance, having a firm understanding of the issues surrounding dividends and dividend policy is now more important than ever. With this book as your guide, you'll be prepared to make the most informed dividend-related decisions possible—even in the most challenging economic conditions. The Robert W. Kolb Series in Finance is an unparalleled source of information dedicated to the most important issues in modern finance. Each book focuses on a specific topic in the field of finance and contains contributed chapters from both respected academics and experienced financial professionals.

Download or read book Dividend Behavior for the Aggregate Stock Market Classic Reprint written by Terry A. Marsh and published by Forgotten Books. This book was released on 2018-02-26 with total page 94 pages. Available in PDF, EPUB and Kindle. Book excerpt: Excerpt from Dividend Behavior for the Aggregate Stock Market In a series of stimulating papers (198la, l98lb, and Robert Shiller uses seemingly powerful variance bounds tests to show that variations in aggregate stock market prices are much too large to be justified by the variation in subsequent dividend payments. Under the assumption that the real expected return on the market remains essentially constant over time, Shiller concludes that the excess variation in stock prices identified in his tests provides strong evidence to reject the Efficient Market Hypothesis. Even if the real expected return on the market does change over time, Shiller further concludes that the amount of variation in that rate necessary to save the Efficient Market Hypothesis is so large that the measured excess variation in stock prices cannot be attributed to this source. We need hardly mention the significance of such a conclusion. If Shiller's rejection of market efficiency is sustained, then serious doubt is cast on the validity of the most important cornerstone of modern financial economic theory. To be sure, of the hundreds of earlier tests of efficient markets, there have been a few which appear to reject market efficiency [cf. About the Publisher Forgotten Books publishes hundreds of thousands of rare and classic books. Find more at www.forgottenbooks.com This book is a reproduction of an important historical work. Forgotten Books uses state-of-the-art technology to digitally reconstruct the work, preserving the original format whilst repairing imperfections present in the aged copy. In rare cases, an imperfection in the original, such as a blemish or missing page, may be replicated in our edition. We do, however, repair the vast majority of imperfections successfully; any imperfections that remain are intentionally left to preserve the state of such historical works.

Download or read book Dividend Behavior for the Aggregate Stock Market written by Terry A. Marsh and published by Forgotten Books. This book was released on 2015-06-16 with total page 82 pages. Available in PDF, EPUB and Kindle. Book excerpt: Excerpt from Dividend Behavior for the Aggregate Stock Market In this paper, we develop a model of the dividend process for the aggregate stock market. Previous research has focused almost exclusively on dividend behavior at the micro level of the individual firm. Hence, to motivate the focus here on aggregate dividend behavior, we begin with a brief review of these earlier micro studies, this to be followed by a discussion which locates the place of our aggregate analysis within this body of research. In Sections 2-5, we derive and fit our econometric model of the dividend process. In Section 6, we compare the performance of the model with other models in the literature. Although long a staple of financial management textbooks, corporate dividend policy remains a topic on which the field has failed to arrive at even a local sense of closure. Fischer Black (1976) has aptly described this lack of closure as the "dividend puzzle." The pivotal point in this puzzle is the classical work of Miller and Modigliani (1961) which demonstrated the irrelevance of dividend policy for determining the firm's cost of capital. Miller and Modigliani showed that when investors can create any payout pattern they want by selling and purchasing shares, the expected return required to induce them to hold these shares will be invariant to the way in which firms "package" gross dividend payments and new issues of stock (and/or other zero net present value transactions). Since neither the firm's expected future net cash flows nor its discount rate is affected by the choice of dividend policy per se, its current market value cannot be changed by a change in that policy. Thus, dividend policy "does not matter." About the Publisher Forgotten Books publishes hundreds of thousands of rare and classic books. Find more at www.forgottenbooks.com This book is a reproduction of an important historical work. Forgotten Books uses state-of-the-art technology to digitally reconstruct the work, preserving the original format whilst repairing imperfections present in the aged copy. In rare cases, an imperfection in the original, such as a blemish or missing page, may be replicated in our edition. We do, however, repair the vast majority of imperfections successfully; any imperfections that remain are intentionally left to preserve the state of such historical works.

Download or read book The Impact of Informed Trading on Dividend Signaling A Theoretical and Empirical Examination written by Kathleen P. Fuller and published by . This book was released on 2001 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper examines how the trading behavior of various investors impacts a firm's need to employ dividend changes to signal private information to the market. The dividend signaling model incorporates asymmetric information among traders as well as between firm insiders and the market. The model explains why, in the cross-section of firms, not all dividend increases are viewed by the market as good news. The model generates the following testable predictions. First, the model predicts a post-signal price increase (on average) for firms increasing their dividends. Second, the market's reaction to an announced dividend increase is inversely related to the measure of informed traders active in a firm's stock. Third, the price reaction to the unexpected dividend change, is conditional upon the disparity between the buy and sell demand; the greater the buy demand relative to the sell demand, the smaller the price reaction. Fourth, the larger the measure of informed traders, the larger the unexpected dividend increase. Finally, these predictions are confronted and supported by the data.

Download or read book A Tax based Test of the Dividend Signaling Hypothesis written by B. Douglas Bernheim and published by . This book was released on 1992 with total page 56 pages. Available in PDF, EPUB and Kindle. Book excerpt: We propose and implement a new test of the dividend signaling hypothesis that is designed to discriminate between dividend signaling and other theories that would account for the apparent existence of a dividend preference. Our test refines the use of data on stock price responses to dividend announcements. In particular, we study the effect of dividend taxation on the bang-for-the-buck, which we define as the share price response per dollar of dividends. Most dividend signaling models imply that an increase in dividend taxation should increase the bang-for-the-buck. In contrast, other dividend preference theories imply that an increase in dividend taxation should decrease the bang-for-the-buck. Since there have recently been considerable variation in the tax treatment of dividends, we are able to study dividend announcement effects under different tax regimes. Our central finding is that there is a strong positive relationship between dividend tax rates and the bang-for-the-buck. This result supports the dividend signaling hypothesis, and is consistent with alternatives. The paper also provides corroborating evidence based on the relationship between the bang-for-the-buck and bond ratings.

Download or read book Payout Policy written by and published by . This book was released on 2007 with total page 83 pages. Available in PDF, EPUB and Kindle. Book excerpt: Dividend policy continues to be among the premier unsolved puzzles in finance. A number of theories have been advanced to explain dividend policy. This e-book briefly reviews the principal theories of payout policy and dividend policy and summarizes the empirical evidence on these theories. Empirical evidence is equivocal and the search for new explanation for dividends continues.

Download or read book Rational Dividend Policy written by Mukesh Bajaj and published by . This book was released on 1988 with total page 146 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Dividend Signaling and Smoothing written by Yoon Dokko and published by . This book was released on 1988 with total page 6 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Optimal Money Burning written by B. Douglas Bernheim and published by . This book was released on 1996 with total page 60 pages. Available in PDF, EPUB and Kindle. Book excerpt: We explore signaling behavior in settings with a discriminating signal and several costly nondiscriminating (money burning) activities. In settings where informed parties have many options for burning money, existing theory provides no basis for selecting one nondiscriminating activity over another. When senders have private information about the costs of these activities, each sender's indifference is resolved, the taxation of a nondiscriminating signal is Pareto improving, and the use of the taxed activity becomes more widespread as the tax rate rises. We apply this analysis to the theory of dividend signaling. The central testable implication of the model is verified empirically.