 Regular Dividend Announcements and Future Unexpected Earnings: An Empirical AnalysisJoseph Aharony and Amihud Dotan The Financial Review, 1994, vol. 29, issue 1, 125-51 Abstract: Previous studies have interpreted stock price reaction to dividend announcements as being consistent with the hypothesis that any changes are forecasts of future corporate profits. Recent studies seem to provide evidence to this effect. This study provides additional empirical evidence pertaining to the issue of whether quarterly cash dividend announcements convey useful information about a firm's future profitability, beyond that contained in contemporaneous quarterly earnings announcements. The association between unexpected changes in quarterly dividends and unexpected accounting earnings in subsequent quarters is examined, after controlling for information contained in past and current earnings series. The results, based on a large sample of regular quarterly cash dividend changes, indicate that firms that increased (decreased) their dividends realized, on average, greater (smaller) unexpected accounting earnings in subsequent periods than firms that did not change their dividends. Copyright 1994 by MIT Press. Date: 1994 There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it. Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:bla:finrev:v:29:y:1994:i:1:p:125-51 Ordering information: This journal article can be ordered from Access Statistics for this article The Financial Review is currently edited by Cynthia J. Campbell and Arnold R. Cowan More articles in The Financial Review from Eastern Finance Association Contact information at EDIRC. |
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