IDEAS home Printed from https://ideas.repec.org/a/bla/jfinan/v42y1987i4p889-911.html
   My bibliography  Save this article

Corporate Financial Policy, Information, and Market Expectations: An Empirical Investigation of Dividends

Author

Listed:
  • Ofer, Aharon R
  • Siegel, Daniel R

Abstract

This paper documents a relationship between announcements of unexpected changes in financial policy and unexpec ted changes in performance of the firm. Using a new methodology that combines analysis of stock price movements and earnings forecast data the authors provide evidence that analysts revise their earnings fo recasts rationally following the announcement of an unexpected divide nd change by an amount positively related to the size of both the une xpected dividend change and the change in equity value surrounding th e announcement. The results provide direct evidence consistent with t he hypothesis that unexpected dividend changes signal information abo ut firm performance to market participants. Copyright 1987 by American Finance Association.

Suggested Citation

  • Ofer, Aharon R & Siegel, Daniel R, 1987. "Corporate Financial Policy, Information, and Market Expectations: An Empirical Investigation of Dividends," Journal of Finance, American Finance Association, vol. 42(4), pages 889-911, September.
    • Handle: RePEc:bla:jfinan:v:42:y:1987:i:4:p:889-911
    as

    Download full text from publisher

    File URL: http://links.jstor.org/sici?sici=0022-1082%28198709%2942%3A4%3C889%3ACFPIAM%3E2.0.CO%3B2-7&origin=repec
    File Function: full text
    Download Restriction: Access to full text is restricted to JSTOR subscribers. See http://www.jstor.org for details.
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bla:jfinan:v:42:y:1987:i:4:p:889-911. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: https://edirc.repec.org/data/afaaaea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.