The impact of dividend reduction on shareholders wealth: evidence from Australia
Paper
Paper/Presentation Title | The impact of dividend reduction on shareholders wealth: evidence from Australia |
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Presentation Type | Paper |
Authors | Balachand, Bala (Author), Krishnamurti, Chandrasekhar (Author) and Vidanapathirana, Berty (Author) |
Editors | Moshirian, Fariborz |
Journal or Proceedings Title | Proceedings of the 20th Australasian Finance and Banking Conference (AFBC 2007) |
Number of Pages | 19 |
Year | 2007 |
Place of Publication | Sydney, Australia |
Web Address (URL) of Paper | http://ssrn.com/abstract=1009567 |
Conference/Event | 20th Annual Australasian Finance and Banking Conference (AFBC 2007) |
Event Details | 20th Annual Australasian Finance and Banking Conference (AFBC 2007) Event Date 12 to end of 14 Dec 2007 Event Location Sydney, Australia |
Abstract | This study examines the stock price reactions to interim and final dividend reductions in Australia. We find that the market reacts more negatively to interim dividend reductions than final dividend reductions consistent with the view that market participants anticipate deterioration in profitability of firms that eventually announce interim dividend reductions. We find that size of the dividend reduction depends on the riskiness of the firm (idiosyncratic risk), size of the firm prior year profitability and changes in the profitability. We also find that reduce dividend at the interim level rather than delay to final stage depends on the prior year profitability and size of the firm. |
Keywords | price reaction; Australia; dividend cuts; omissions; interim and final |
ANZSRC Field of Research 2020 | 350208. Investment and risk management |
359999. Other commerce, management, tourism and services not elsewhere classified | |
380107. Financial economics | |
Public Notes | File reproduced in accordance with the copyright policy of the publisher/author. |
Byline Affiliations | La Trobe University |
Monash University |
https://research.usq.edu.au/item/q02q9/the-impact-of-dividend-reduction-on-shareholders-wealth-evidence-from-australia
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