STOCK DIVIDENDS AS SIGNALS

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30 Scopus citations

Abstract

This study analyzes stock dividends as signals from managers. It is argued that in the presence of information asymmetries between managers and investors, stock dividends provide a relatively inexpensive and unambiguous signalling device. Based on an examination of the daily returns around 317 stock dividend announcements, it is concluded that these announcements are interpreted by investors as signals from managers. Further analysis also indicates that stock dividend size is positively related to announcement day returns.

Original languageEnglish (US)
Pages (from-to)1-12
Number of pages12
JournalJournal of Financial Research
Volume6
Issue number1
DOIs
StatePublished - Jan 1 1983

All Science Journal Classification (ASJC) codes

  • Accounting
  • Finance

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