Dividend reductions, the timing of dividend payments and information content
Article
Article Title | Dividend reductions, the timing of dividend payments and information content |
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ERA Journal ID | 19561 |
Article Category | Article |
Authors | Balachandran, Balasingham (Author), Krishnamurti, Chandrasekhar (Author), Theobald, Michael (Author) and Vidanapathirana, Berty (Author) |
Journal Title | Journal of Corporate Finance |
Journal Citation | 18 (5), pp. 1232-1247 |
Number of Pages | 16 |
Year | 2012 |
Place of Publication | Amsterdam, Netherlands |
ISSN | 0929-1199 |
1872-6313 | |
Digital Object Identifier (DOI) | https://doi.org/10.1016/j.jcorpfin.2012.08.002 |
Web Address (URL) | http://www.sciencedirect.com/science/article/pii/S0929119912000892 |
Abstract | Australian companies pay dividends semi-annually with smaller 'interim' payments and larger 'final' payments. Interim dividends are declared and paid within a less full information environment than final dividends. We analyze the interactions between the timing of dividends and their information content, controlling for share repurchase and tax effects. Dividend reductions that are not associated with share repurchases are statistically significantly related to future abnormal earnings and provide strong support for the information content of dividend reductions. The percentage of dividend reduction is stronger for interim than for final dividend reductions. The market reaction is negatively related to the reduction in imputation tax credit and reacts more aggressively and negatively to interim as compared to final dividend reductions. |
Keywords | Australia; dividend reductions; franked and unfranked; information content; interim and final; price reactions |
ANZSRC Field of Research 2020 | 350108. Taxation accounting |
350208. Investment and risk management | |
380107. Financial economics | |
Public Notes | Files associated with this item cannot be displayed due to copyright restrictions. |
Byline Affiliations | La Trobe University |
School of Accounting, Economics and Finance | |
Mifranthe Associates, United Kingdom | |
Monash University | |
Institution of Origin | University of Southern Queensland |
https://research.usq.edu.au/item/q17wv/dividend-reductions-the-timing-of-dividend-payments-and-information-content
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