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An adjusted Lintner-model for the Netherlands

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  • Dorsman, A.B.

    (Vrije Universiteit Amsterdam, Faculteit der Economische Wetenschappen en Econometrie (Free University Amsterdam, Faculty of Economics Sciences, Business Administration and Economitrics)

  • Montfort, K. van
  • Vink, I.

Abstract

The informative value given by the announcement of distribution of dividend has already been investigated. One of the leading studies on this matter is Lintner (1956). Lintner found a relation between mutation in dividend, profits in the current financial year and the dividend in the last financial year. This dividend-model is known as the Lintner-model. When the mutation in the dividend differs from what was to be expected by this dividend-model, Lintner finds this to have informative value regarding the amount of profit in the future. In 197 1 I/B/E/S International started a financial data-file, The Institutional Brokers Estimate System (I/B/E/S). This data-file contains the expectations of the analysts regarding profit. Since 1989 I/B/E/S is collecting this data also for Dutch firms. In this article an extra variable is added to the Lintner-model, namely the expectations collected by I/B/E/S mentioned above. The purpose of this article is to find out if there is still informative value regarding the amount of profit in the future when the mutation in the dividend differs from what was to be expected by this adjusted Lintner-model.

Suggested Citation

  • Dorsman, A.B. & Montfort, K. van & Vink, I., 1999. "An adjusted Lintner-model for the Netherlands," Serie Research Memoranda 0020, VU University Amsterdam, Faculty of Economics, Business Administration and Econometrics.
    • Handle: RePEc:vua:wpaper:1999-20
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    References listed on IDEAS

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    1. Jensen, Michael C. & Meckling, William H., 1976. "Theory of the firm: Managerial behavior, agency costs and ownership structure," Journal of Financial Economics, Elsevier, vol. 3(4), pages 305-360, October.
    2. Merton H. Miller & Franco Modigliani, 1961. "Dividend Policy, Growth, and the Valuation of Shares," The Journal of Business, University of Chicago Press, vol. 34, pages 411-411.
    3. George A. Akerlof, 1970. "The Market for "Lemons": Quality Uncertainty and the Market Mechanism," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 84(3), pages 488-500.
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    Cited by:

    1. Abe de Jong & Henry van Beusichem, 2009. "The changing role of dividend policies: an empirical analysis for the Netherlands 1945-2006," Working Papers 9024, Economic History Society.
    2. Darakhshan Younis & Attiya Yasmin Javid, 2014. "Market Imperfections and Dividend Policy Decisions of Manufacturing Sector of Pakistan," PIDE-Working Papers 2014:99, Pakistan Institute of Development Economics.

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    JEL classification:

    • G14 - Financial Economics - - General Financial Markets - - - Information and Market Efficiency; Event Studies; Insider Trading

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