Dividend Announcement Effect To Market Reaction in Non-Financial Companies Listed on Indonesia Stock Exchange

This study aims to examine the differences in market reaction before and after the announcement of dividend omissions and dividend initiations in non- financial companies listed on the Indonesia Stock Exchange in 2016-2018. The sample used in this study was 71 companies consisting of 26 companies that announced dividend omissions and 45 companies that announced dividend initiations. The sample was determined using the purposive sampling method. This study used the event study method with an event window period of 5 days before the announcement, the announcement day, and 5 days after the announcement. The Wilcoxon Signed Ranks Test results in this study indicate that there are no differences in market reaction before and after the announcement of dividend omissions. Meanwhile the announcement of dividend initiations shows that there are differences in market reaction before and after the announcement of dividend initiations. Keywords: Event study, Dividend Omissions, Dividend Initiations, Abnormal Return

Stock Market Reactions to Dividend Announcements: Empirical Evidence From the Singapore Stock Market

The present study investigates the 50 randomly selected companies from Singapore Stock Exchange to assess the impact of the dividend initiation announcement and omission announcement on the share prices of the companies under study. The study has analyzed the impact of dividend initiations announcement on the size of firms by dividing the firms into small and big categories. Further, the relationship between changes in dividend and company’s future earnings is also analyzed. The study finds that the dividend initiation announcement’s impact on the share prices of Singapore companies is trivial and uncertain.

Are dividends and share repurchases substitutes? : evidence from the reaction of financial analysts

In this study, I propose a novel test that can contribute towards resolving whether repurchases do in fact substitute for dividends. I contend that using the reactions of financial analysts to announcements of dividends initiations / increases and share repurchases can effectively test whether repurchases do substitute for dividends. If the substitution hypothesis holds, then the analysts' changes in recommendations following the announcement of a dividend initiation or increase and a repurchase announcement should be the same, ceteris paribus. My findings show that when analysts' reactions include no changes, positive and negative changes in recommendation, dividends and repurchases are viewed as substitutes. However, when there is an actual change in the analysts' recommendation following a distribution announcement, the analysts downgrade more and upgrade less the firms that announce share repurchases programs as opposed to dividend initiations / increases. They are also more likely to make a recommendation change when there is a share repurchases announcement. Further, I explore whether the analysts' preference might be justified. Specifically, I investigate how the signal quality of the payout method, the potential for earnings management of the payout method, or behavioral biases might play a role in the analysts' decision making process. I find that, given an actual change in recommendation, financial analysts upgrade less and downgrade more firms with share repurchases announcements when the firms are associated with higher earnings management, during period of higher demand for dividends, and when the firms have been downgraded in the month preceding the announcement. Financial analysts view dividends and repurchases as substitutes post 2004 and when repurchases are classified as serial repurchases.

The information content of dividend initiation announcements

Purpose The purpose of this paper is to examine the dividend initiation announcements made by firms in the information technology sector as defined in a modern system of industrial classification. Design/methodology/approach On the basis of a modern classification of the information technology industry, the authors examine a wide range of corporate performance and management measures to discriminate between the two theories of the information revealed by the announcement of dividend initiations, the signaling, and life cycle theories. Findings The empirical results are more consistent with the corporate life cycle theory of dividends than with the information signaling hypothesis. This finding helps clarify the nature of the information revealed by the announcement. Originality/value The paper has clear implications for investors who are interested in the growth prospects of technology firms, or for others interested in their prospective stability and degree of maturity.

Behavioral Analysis of Investors’ Attitude towards Dividend Declaration in Developing Country–A Case of Bangladesh

<p>Dividend paying on share is one of the most significant topics of behavioral finance and Capital Market literature. Previous research attempts to evidence on dividend declaration and investors’ perception based on developed economies. This research attempts to fill the gap between developed and developing economies on dividend deceleration of investors’ perception. The aim of this research is to investigate empirical facts on dividend clienteles in Bangladesh Capital Market as well as scrutinize the correlations among various dividend expectation and the diverse attributes of investors’ community in Bangladesh on dividend payment. Also, it aims to test theories those have previously been built concerning on dividends paying stock of investor perceptions. The study has been conducted on 250 active stratified random samples of Bangladeshi investors who provided data related to dividends preferences by conducting face to interview with structured questionnaires. This research support that there is negative association between stipulate for dividend paying stocks and investors demographic attributes in the Bangladesh Capital Market. We find that corporate managers do not consider investors expectation on dividend paying stock. The study also reveals that one of the most important determinants of dividend initiations among Bangladeshi firms are the value-weighted dividend yield in the industry. As well as investors’ perception depends on different attributes of investors’ and dividend preference.</p>