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Significance of a change in dividend payment frequency

Author

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  • Edson Kambeu

    (Business Management, BAISAGO University, Francistown, Botswana)

Abstract

The objective of this paper is to analysethe significance of a change in dividend payment frequency. We initially argue that a change in dividend payment frequency is significant and relevant in the same manner as a change in dividend policy. We analyse the subject using an event study of Sechaba Holdings, a firm listed on the Botswana Exchange` that decided to change its dividend payment frequency from quarterly to bi-annual payment to examine the subject. We specifically used an event study methodology that analyses the significance of abnormal returns that occurred during the event period. The study revealed that the firm’s decision to change its dividend payment frequency did not significantly affect abnormal returns during the event period. The study therefore contradicted our initial argument that a change in dividend payment frequency is significant and relevant.

Suggested Citation

  • Edson Kambeu, 2017. "Significance of a change in dividend payment frequency," International Journal of Finance & Banking Studies, Center for the Strategic Studies in Business and Finance, vol. 6(1), pages 134-140, January.
    • Handle: RePEc:rbs:ijfbss:v:6:y:2017:i:1:p:134-140
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    References listed on IDEAS

    as
    1. Maria Rosa Borges, 2008. "Is the Dividend Puzzle Solved?," Working Papers Department of Economics 2008/38, ISEG - Lisbon School of Economics and Management, Department of Economics, Universidade de Lisboa.
    2. A. Craig MacKinlay, 1997. "Event Studies in Economics and Finance," Journal of Economic Literature, American Economic Association, vol. 35(1), pages 13-39, March.
    3. Stephen P. Ferris & Gregory Noronha & Emre Unlu, 2010. "The More, the Merrier: An International Analysis of the Frequency of Dividend Payment," Journal of Business Finance & Accounting, Wiley Blackwell, vol. 37(1‐2), pages 148-170, January.
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