journal of accounting advances (j.a.a) vol. 2, no. 2, fall & winter 2010, ser. 59/3     extended abstract   an investigation of agency theory and signaling theory in dividend policies: the role of institutional investors   dr. g. r. karami         dr. s. mehrani               h. eskandar tehran university   introduction        dividend has a special position among decision makers. dividend poli...

We develop new tests of the dividend signaling hypothesis by focusing on the role of liquidity. We allow for two different types of signaling models: one where current dividends signal firm value and the objective is to prevent current dilution, and the other where commitments to future dividends constitute the signal. We find that the results differ by the sign of the dividend surprise. Signal...

This paper examines the stock price sensitivity to dividend changes. The Dividend Signaling, the Free-Cash-Flow, the Maturity and the Catering Hypotheses all predict an average positive (negative) reaction to announcement of a dividend increase (decrease). However, these hypotheses have different cross-sectional predictions. This paper documents that the positive stock price response to dividen...

effects of dividend policy on corporate financial growth, is a major concern of most entities. whether dividends have an influence on the value of the firm, is an important question in dividend policy. this study aimed at investigating the effects of dividend policy on financial growth of media firms. the study was conducted in nairobi at the nation media group headquarters. respondents were se...

The present study analyzes the results of 2001 survey of 81 CFOs of bt-500 companies and her most valuable PSUs in India to find out the determinants of the dividend policy decisions of the corporate India. It uses factor analytic framework on the CFOs' responses to capture the determinants of the dividend policy of corporate India. Most of the firms have target dividend payout ratio and divide...

In this study, we examine the impact of dividend and capital gains taxes on dividendincrease announcement returns. Consistent with Bernheim and Wantz (1995), we find dividend announcement returns increase in the dividend tax rate. In contrast to existing signaling models, however, we also find robust evidence that dividend announcement returns increase in the capital gains tax rate. This anomal...

This paper offers a new mathematical formulation that addresses the relationship between expected price-to-book ratio, dividend per share, dividend payout ratio, systematic and unsystematic risks. The sample includes the non-financial firms in the DJIA covering the period 1997-2006. The general results show that the expected price-to-book ratios are: (a) positively associated with the expected ...

In this paper we study the significance of dividend initiations in the context of firm performance, risk, and shareholder returns. Our evidence contradicts the principal implication of the signaling hypothesis that increase in dividend rate is positively related to future firm prosperity. We observe that firms report improving profitability, cash flow and other performance measures leading up t...

This study investigates the market reaction to dividend change announcements at the Istanbul Stock Exchange. A sample of 184 announcements made by 46 companies during the period 2005 to 2008 is analyzed by using the event study methodology. The results suggest that the market reacts positively to dividend increases, negatively to dividend decreases and does not react when dividends are not chan...

One of the most important issues in corporate finance is whether dividend changes contain information about future earnings and profitability. Although dividend signaling theories imply that dividend increases signal better prospects (e.g., Bhattacharya 1979; John and Williams 1985; andMiller and Rock 1985), many empirical studies have failed to support this idea. Studies by Watts (1973), Goned...