Journal article
The Signaling Power of Specially Designated Dividends
Journal of financial and quantitative analysis, v 34(3), pp 409-424
Sep 1999
Abstract
We distinguish among the signaling, free cash flow, and wealth transfer hypotheses in explaining the stock price reaction to specially designated dividend (SDD) announcements. In a direct test of the signaling power of SDDs, we find both a larger stock price reaction and a significant upward revision of earnings forecasts for firms with Tobin's q less than one, but not for other firms. Our results support the conditional signaling hypothesis, which predicts greater effects of favorable information for low q firms. Taken together, our results for stock price effects and earnings forecast revisions do not support either the free cash flow or wealth transfer hypotheses.
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Details
- Title
- The Signaling Power of Specially Designated Dividends
- Creators
- Michael J. Gombola - Drexel UniversityFeng-Ying Liu - Rider University
- Publication Details
- Journal of financial and quantitative analysis, v 34(3), pp 409-424
- Publisher
- Cambridge University Press
- Number of pages
- 16
- Resource Type
- Journal article
- Language
- English
- Academic Unit
- [Retired Faculty]
- Web of Science ID
- WOS:000082316900006
- Scopus ID
- 2-s2.0-0033422037
- Other Identifier
- 991019168200404721
InCites Highlights
Data related to this publication, from InCites Benchmarking & Analytics tool:
- Collaboration types
- Domestic collaboration
- Web of Science research areas
- Business, Finance
- Economics