Dividend omissions and intraindustry information transfers

We examine potential information transfers from companies that announce dividend omissions to their industry rivals. Specifically, we examine the abnormal stock returns and abnormal earnings forecast revisions of rivals after a company makes a dividend-omission announcement. Our results show negativ...

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Main Authors: CATON, Gary L., GOH, Jeremy, KOHERS, Ninon
格式: text
語言:English
出版: Institutional Knowledge at Singapore Management University 2003
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在線閱讀:https://ink.library.smu.edu.sg/lkcsb_research/2205
https://ink.library.smu.edu.sg/context/lkcsb_research/article/3204/viewcontent/Dividend_Omissions_2003_av.pdf
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機構: Singapore Management University
語言: English
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總結:We examine potential information transfers from companies that announce dividend omissions to their industry rivals. Specifically, we examine the abnormal stock returns and abnormal earnings forecast revisions of rivals after a company makes a dividend-omission announcement. Our results show negative and significant abnormal stock returns and negative and significant abnormal forecast revisions for rival companies in response to the announcement, and a significant and positive relation between the two. We conclude that a dividend-omission announcement transmits unfavorable information across the announcing company's industry that affects cash flow expectations and ultimately stock prices.