Corporate Dividends and Seasoned Equity Issues: An Empirical Investigation
AbstractThis paper investigates whether managers rely on dividends to obtain a higher price in a stock offering and whether the stock price reaction to dividend and offering announcements justifies such a coordination. The evidence does not support either conjecture. Issuing firms are not more likely to pay or increase dividends than nonissuing firms. Moreover, there is little evidence that firms time stock-offering announcements right after dividend declarations to benefit from the attendant information disclosure. The analysis of dividend and stock-offering announcement effects suggests few if any benefits from linking dividend and stock-offering announcements. Copyright 1992 by American Finance Association.
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Bibliographic InfoArticle provided by American Finance Association in its journal Journal of Finance.
Volume (Year): 47 (1992)
Issue (Month): 1 (March)
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- Chung, Kee H. & Wright, Peter & Charoenwong, Charlie, 1998. "Investment opportunities and market reaction to capital expenditure decisions," Journal of Banking & Finance, Elsevier, vol. 22(1), pages 41-60, January.
- Karpavičius, Sigitas, 2014. "Dividends: Relevance, rigidity, and signaling," Journal of Corporate Finance, Elsevier, vol. 25(C), pages 289-312.
- Yanzhi Wang & Sheng-Syan Chen & Yen-Ting Cheng, 2011. "Revisiting corporate dividends and seasoned equity issues," Review of Quantitative Finance and Accounting, Springer, vol. 36(1), pages 133-151, January.
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- D'Mello, Ranjan & Krishnaswami, Sudha & Larkin, Patrick J., 2008. "Determinants of corporate cash holdings: Evidence from spin-offs," Journal of Banking & Finance, Elsevier, vol. 32(7), pages 1209-1220, July.
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