Journal article
Do dividend omissions signal future earnings or past earning?
The Journal of investing, Vol.6(1), p40
01 Apr 1997
Abstract
All previous studies of the relationship between firm value and dividend omission announcements document, on average, a negative announcement period abnormal stock return associated with dividend omission. The implication of previous research findings is that the negative stock price reaction is the result of the release of unfavorable information about future cash flows. This interpretations consistent with the signaling hypothesis. However, contrary to popular belief, dividend omissions do not convey information about expectations of a firm's future earnings declines. Evidence is provided that supports the proposition that dividend omissions say something about the permanence of pre-announcement earnings declines. They occur after a period of declining expectations of firm earnings, when abnormal forecast revisions for long-term growth are positive.
Metrics
1 Record Views
Details
- Title
- Do dividend omissions signal future earnings or past earning?
- Creators
- Samuel SzewczykGeorge TsetsekosZaher Zantout
- Publication Details
- The Journal of investing, Vol.6(1), p40
- Publisher
- Pageant Media
- Resource Type
- Journal article
- Language
- English
- Academic Unit
- Finance
- Identifiers
- 991021881512604721