Dividend changes and stock price informativeness

Amedeo De Cesari, Winifred Huang-Meier

Research output: Contribution to journalArticle

  • 6 Citations

Abstract

We investigate how private information in stock prices impacts quarterly dividend changes. We find that the positive relationship between past returns and current dividend changes strengthens when returns convey more private information. This finding is robust to the use of several price informativeness measures and the inclusion of managerial private information and stock overvaluation measures. Managers seem to learn new information from stock prices that they use when deciding on their dividend policy. This study highlights private information in stock prices as an important determinant of dividend policy and contributes to the literature on the real effects of financial markets.
LanguageEnglish
Pages1-17
Number of pages17
JournalJournal of Corporate Finance
Volume35
Early online date20 Aug 2015
DOIs
StatusPublished - Dec 2015

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Price informativeness
Private information
Stock prices
Dividends
Dividend policy
Price impact
Managers
Overvaluation
Inclusion
Financial markets

ASJC Scopus subject areas

  • Finance

Cite this

Dividend changes and stock price informativeness. / De Cesari, Amedeo ; Huang-Meier, Winifred.

In: Journal of Corporate Finance, Vol. 35, 12.2015, p. 1-17.

Research output: Contribution to journalArticle

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