Corporate Financial Policy, Information, and Market Expectations: An Empirical Investigation of Dividends

Aharon R Ofer and Daniel R Siegel

Journal of Finance, 1987, vol. 42, issue 4, 889-911

Abstract: This paper documents a relationship between announcements of unexpected changes in financial policy and unexpec ted changes in performance of the firm. Using a new methodology that combines analysis of stock price movements and earnings forecast data the authors provide evidence that analysts revise their earnings fo recasts rationally following the announcement of an unexpected divide nd change by an amount positively related to the size of both the une xpected dividend change and the change in equity value surrounding th e announcement. The results provide direct evidence consistent with t he hypothesis that unexpected dividend changes signal information abo ut firm performance to market participants. Copyright 1987 by American Finance Association.

Date: 1987
References: Add references at CitEc
Citations: View citations in EconPapers (45)

Downloads: (external link)
http://links.jstor.org/sici?sici=0022-1082%2819870 ... O%3B2-7&origin=repec full text (application/pdf)
Access to full text is restricted to JSTOR subscribers. See http://www.jstor.org for details.

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:bla:jfinan:v:42:y:1987:i:4:p:889-911

Ordering information: This journal article can be ordered from
http://www.afajof.org/membership/join.asp

Access Statistics for this article

More articles in Journal of Finance from American Finance Association Contact information at EDIRC.
Bibliographic data for series maintained by Wiley Content Delivery ().