Asymmetric price reactions to dividend announcements: Always irrational?

Bartosz Gebka

Economics Letters, 2019, vol. 185, issue C

Abstract: We demonstrate analytically that markets tend to react stronger to announcements of dividend cuts vs. increases when dividend payout costs are relatively low. This asymmetry prevails when investors are entirely rational, in contrast to Baker’s et al. (2016) prospect-theory-based explanation.

Keywords: Dividend signaling; Investor rationality; Prospect theory (search for similar items in EconPapers)
JEL-codes: G10 G35 (search for similar items in EconPapers)
Date: 2019
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0165176519303544
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:185:y:2019:i:c:s0165176519303544

DOI: 10.1016/j.econlet.2019.108713

Access Statistics for this article

Economics Letters is currently edited by Economics Letters Editorial Office

More articles in Economics Letters from Elsevier
Bibliographic data for series maintained by Catherine Liu ().