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Earnings expectations and the relative information content of dividend and earnings announcements

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  • Roger Best
  • Ronald Best

Abstract

Recent studies of financial analysis' earnings forecast revisions following dividend announcements suggest that dividends convey information regarding a firm's future prospects. In this study, we extend the analysis by explicitly controlling for earnings information released during the forecast revision measurement period. Our results suggest that earnings forecast revisions previously attributed to dividend announcements are driven primarily by earnings surprise. At best, dividends appear to serve a corroborative role. Copyright Springer 2000

Suggested Citation

  • Roger Best & Ronald Best, 2000. "Earnings expectations and the relative information content of dividend and earnings announcements," Journal of Economics and Finance, Springer;Academy of Economics and Finance, vol. 24(3), pages 232-245, September.
    • Handle: RePEc:spr:jecfin:v:24:y:2000:i:3:p:232-245
    DOI: 10.1007/BF02752605
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    References listed on IDEAS

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    7. Kirsten M. Ely & Vivek Mande, 1996. "The Interdependent Use of Earnings and Dividends in Financial Analysts' Earnings Forecasts," Contemporary Accounting Research, John Wiley & Sons, vol. 13(2), pages 435-456, September.
    8. Sudipto Bhattacharya, 1979. "Imperfect Information, Dividend Policy, and "The Bird in the Hand" Fallacy," Bell Journal of Economics, The RAND Corporation, vol. 10(1), pages 259-270, Spring.
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    Cited by:

    1. Warwick Anderson, 2013. "The Role of mid-year dividends as predictors of yearly earnings," Working Papers in Economics 13/01, University of Canterbury, Department of Economics and Finance.

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