Contagion Effects of Dividend Reduction or Omission Announcements in the Electric Utility Industry

Michael Impson

The Financial Review, 2000, vol. 35, issue 1, 121-36

Abstract: This study examines the contagion effects of dividend reduction or omission announcements in the electric utility industry. Using a series of ten electric utility dividend announcements covering the period 1979-91, I analyze differences in contagion reactions across utilities. I find the strength of the contagion reaction is significantly related to utility size, average dividend yield, debt ratio, market-to-book ratio, cash flow, and Altman's Z-score. There is also evidence of a flight to quality, including a preference for utilities operating in more favorable regulatory environments. Copyright 2000 by MIT Press.

Date: 2000
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Persistent link: https://EconPapers.repec.org/RePEc:bla:finrev:v:35:y:2000:i:1:p:121-36

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