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Article
Publication date: 1 February 2004

L.R. GORMAN, R.A. WEIGAND and T.J. ZWIRLEIN

We investigate the empirical characteristics of firms resuming cash dividends to determine if dividend resumption is most like dividend initiation, a large dividend increase, or a

306

Abstract

We investigate the empirical characteristics of firms resuming cash dividends to determine if dividend resumption is most like dividend initiation, a large dividend increase, or a completely unique event. Firms that resume dividends earn considerably larger returns than firms initiating or increasing dividends, both before and after the announcement. Dividend‐resuming firms exhibit changes in profits similar to firms increasing dividends, but the risk change following dividend resumption is more like that reported by studies of dividend initiation. These findings are unaffected by the length of time it takes firms to resume paying cash dividends, or whether the firm also declares a stock split and/or stock dividend during the period surrounding the resumption announcement. We conclude that dividend resumption is sufficiently unlike other dividend events to be regarded and studied as its own unique event.

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Studies in Economics and Finance, vol. 22 no. 2
Type: Research Article
ISSN: 1086-7376

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Book part
Publication date: 14 November 2022

Narayanage Jayantha Dewasiri, H. Kent Baker, Y. K. Weerakoon Banda and M. Shanika Hansini Rathnasiri

This chapter provides an overview of the explanations and factors affecting dividend policy. This study employs a systematic literature review approach to review a large sample of…

Abstract

This chapter provides an overview of the explanations and factors affecting dividend policy. This study employs a systematic literature review approach to review a large sample of studies related to the dividend puzzle. Although the analysis reveals mixed evidence involving the theories and determinants of dividend policy, some determinants appear in numerous studies. However, no consensus exists on an optimal dividend to resolve the dividend puzzle, and the authors propose a model to deal with the same. When examining dividend policy, researchers should consider the firm, market, behavior, and other determinants. When making significant dividend or stock decisions, managers and shareholders should also contemplate the factors, interactions, inadequacies, and consequences. Future researchers should strive to take a more comprehensive view when resolving the dividend puzzle. This study provides a current and complete picture of dividend policy's available theories and empirical determinants. Its significant contribution is identifying some of the more consistently essential determinants of dividend policy while proposing a holistic model to address the prevailing dividend dilemma.

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Exploring the Latest Trends in Management Literature
Type: Book
ISBN: 978-1-80262-357-4

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Article
Publication date: 8 May 2009

Neil L. Fargher and Robert A. Weigand

Purpose– The purpose of this paper is to examine cross‐sectional differences in the profits, returns and risk of high‐ and low‐market‐to‐book ratios (M/B) stocks before and after…

1933

Abstract

Purpose– The purpose of this paper is to examine cross‐sectional differences in the profits, returns and risk of high‐ and low‐market‐to‐book ratios (M/B) stocks before and after the initiation of regular cash dividend payments. Design/methodology/approach– This study uses parametric and non‐parametric statistics and ordinary least squares regression to test for differences in the profits, returns and risk of high‐ and low‐M/B stocks before and after dividend initiation. Findings– Low‐M/B stocks display the most positive price reaction to dividend initiation announcements. High‐M/B firms have larger profits, cash levels and capital expenditure before and at the time of dividend initiation, but more closely resemble the low‐M/B firms in terms of these characteristics within three years following dividend initiation. Excess returns earned by low‐M/B firms are related to decreases in systematic risk, while the returns of high‐M/B firms are related to their higher profitability. Research limitations/implications– Averaging results from 1965‐2000 does not account for possible changes in the information content of dividend initiations over time (as evidenced by steadily declining dividend yields over this period). Practical implications– The findings are consistent with the idea that firms begin paying dividends as they are maturing into a slower growth period, and do not support the idea that dividend initiation signals faster future earnings growth. Originality/value– The analysis adds to the body of knowledge by explicitly conditioning the expectations from various dividend theories based upon individual firms’ growth phase as reflected in their M/B ratios, and suggests that signaling, agency and risk explanations for dividends must be considered jointly with a firm's growth prospects when studying dividend events.

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Managerial Finance, vol. 35 no. 6
Type: Research Article
ISSN: 0307-4358

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Article
Publication date: 10 July 2017

Susana Yu and Gwendolyn Webb

The purpose of this paper is to examine the dividend initiation announcements made by firms in the information technology sector as defined in a modern system of industrial…

934

Abstract

Purpose

The purpose of this paper is to examine the dividend initiation announcements made by firms in the information technology sector as defined in a modern system of industrial classification.

Design/methodology/approach

On the basis of a modern classification of the information technology industry, the authors examine a wide range of corporate performance and management measures to discriminate between the two theories of the information revealed by the announcement of dividend initiations, the signaling, and life cycle theories.

Findings

The empirical results are more consistent with the corporate life cycle theory of dividends than with the information signaling hypothesis. This finding helps clarify the nature of the information revealed by the announcement.

Originality/value

The paper has clear implications for investors who are interested in the growth prospects of technology firms, or for others interested in their prospective stability and degree of maturity.

Details

Managerial Finance, vol. 43 no. 7
Type: Research Article
ISSN: 0307-4358

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Book part
Publication date: 24 October 2013

Suk-Joong Kim, Linda Lee and Eliza Wu

This chapter investigates the impact of policy interest rate news from the U.S. Federal Reserve (Fed) and the European Central Bank (ECB) on stock returns and volatilities of U.S…

Abstract

This chapter investigates the impact of policy interest rate news from the U.S. Federal Reserve (Fed) and the European Central Bank (ECB) on stock returns and volatilities of U.S. NYSE and German DAX listed commercial banks. We find that Fed news has the most influence on both U.S. and German listed bank stocks and an unexpected policy rate increase (decrease) lowers (raises) returns and raises volatility in the majority of cases. On the other hand, ECB news generally increases bank stock volatility in the United States but has little impact within its own domestic banking industry. While our results for the U.S. listed banks confirm that their stock prices are more responsive in bad economic times and also during periods of monetary tightening, we find disparities for German banks suggesting that U.S. and European banking industries respond heterogeneously to monetary policy news but the Global Financial Crisis increased the sensitivity of all banks to monetary policy news.

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Global Banking, Financial Markets and Crises
Type: Book
ISBN: 978-1-78350-170-0

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Article
Publication date: 9 February 2015

H. Kent Baker and Rob Weigand

1543

Abstract

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Managerial Finance, vol. 41 no. 2
Type: Research Article
ISSN: 0307-4358

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Book part
Publication date: 20 October 2023

Rebecca M. Hayes

Abstract

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Defining Rape Culture: Gender, Race and the Move Toward International Social Change
Type: Book
ISBN: 978-1-80262-214-0

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Book part
Publication date: 10 April 2019

Richa Saxena and Vibhav Singh

The purpose of the chapter is to integrate the understanding of diversity from different perspectives in Indian context and see how the holistic view emerges.

Abstract

Purpose

The purpose of the chapter is to integrate the understanding of diversity from different perspectives in Indian context and see how the holistic view emerges.

Methodology

The methodology used is primarily the literature review of the concepts and their evolution in Indian context and the use of secondary sources to extract praxis information.

Findings

It emerged from the exploration on diversity practices at the societal as well as organizational level in India that the country demonstrates intent to mainstream the people from different wakes, but with the changing context the format of the practices has changed.

Research Limitations

The basic premise of the chapter needs to be explored further through primary data from practice.

Originality

This chapter is novel in a way that it integrates the diversity scholarship of four different streams viz. caste, gender, disability, and generation. Most of the existing research focuses only on a thin slice/one key dimension of diversity.

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Diversity within Diversity Management
Type: Book
ISBN: 978-1-78754-821-3

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Book part
Publication date: 18 October 2017

Lucy Taksa and Dimitria Groutsis

Most publications on the management of diversity in Western countries pay homage to history by referring back to the way regulatory frameworks developed to promote equal treatment…

Abstract

Most publications on the management of diversity in Western countries pay homage to history by referring back to the way regulatory frameworks developed to promote equal treatment and to oppose discrimination. In work on English speaking countries, particular attention has been given to the struggles waged in the USA for civil rights and for gender equality in the 1960s and their impact on the emergence of equal employment opportunity and affirmative action laws and policies. Generally, these developments are depicted as the antecedents to the emergence of diversity management in the USA. This genealogical orientation is usually designed to establish historical foundations. However, as we see it, this approach to history has promoted an impression of linear evolution. Our general aim in this chapter is to show how an historical perspective can help uncover continuities in regard to equal employment opportunity, affirmative action and diversity management policies and strategies in Australia, particularly in relation to the management of cultural diversity in Australian workplaces. Rather than seeing development in linear terms, our aim is to highlight connections and the implications of such connections. Accordingly, this chapter relates each of these policies/strategies to analogous political and legal developments that emerged concurrently, in particular such initiatives as multiculturalism, anti-discrimination laws and what became known in Australia as ‘productive diversity’ policies.

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Article
Publication date: 1 December 2004

Steven J. Cochran

This study investigates whether cyclical turning points in the U.S. and U.K. stock markets are unevenly distributed over the year, that is, whether they are more likely to occur…

445

Abstract

This study investigates whether cyclical turning points in the U.S. and U.K. stock markets are unevenly distributed over the year, that is, whether they are more likely to occur during certain months of the year. In examining this form of periodic seasonality, a Markov switching‐model is applied to U.S. and U.K. stock market chronologies of monthly peak and trough dates for the periods May 1835 through March 2000 and May 1836 through September 2000, respectively. In order to provide some evidence on robustness with respect to the sample data, results are obtained for the entire sample periods as well as for various sub‐. For both markets, the evidence indicates that while the probability of moving from an expansion to a contraction does not depend on the month of the year, the probability of switching from a contraction is greater for some months. Additionally, the durations of contractions, but not expansions, are dependent on the month of the year in which they begin.

Details

Managerial Finance, vol. 30 no. 12
Type: Research Article
ISSN: 0307-4358

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