Do dividends signal information about future earnings?

Khaled Hussainey ()

Applied Economics Letters, 2009, vol. 16, issue 12, 1285-1288

Abstract: This article aims to examine the extent to which dividends signal information about future earnings. It examines the effects of dividend payment status and the change in dividend payment on the relation between current stock returns and future earnings. The results show that dividends contain value relevant information about future earnings and that this information is incorporated into current stock returns. In particular, we find that firms that pay dividends at the current year exhibit higher levels of share price anticipation of earnings than nondividend-paying firms. We also find that the change in dividends is positively related to changes in the importance of future earnings news for current stock returns. Finally, we find that the relevance of dividends for forecasting future earnings is greater for loss-making firms than for profitable firms.

Date: 2009
References: Add references at CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
http://www.informaworld.com/openurl?genre=article& ... 40C6AD35DC6213A474B5 (text/html)
Access to full text is restricted to subscribers.

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:taf:apeclt:v:16:y:2009:i:12:p:1285-1288

Ordering information: This journal article can be ordered from
http://www.tandfonline.com/pricing/journal/RAEL20

DOI: 10.1080/17446540802403635

Access Statistics for this article

Applied Economics Letters is currently edited by Anita Phillips

More articles in Applied Economics Letters from Taylor & Francis Journals
Bibliographic data for series maintained by Chris Longhurst ().