Hard Times or Great Expectations? Dividend Omissions and Dividend Cuts by UK Firms
AbstractThis paper uncovers an increasing proportion of quoted UK companies omitting cash dividends. Using a large panel of quoted UK firms, we estimate panel data probit models for the incidence of dividend omissions and cuts as functions of financial characteristics including cash flow, leverage, investment opportunities, investment and company size. These variables account for most of the increase in omission since 1995. There is relatively little evidence to link this to the major tax reform of 1997 that abolished tax refunds on dividend income payable to tax-exempt institutions. Significant persistence effects indicate companies are slow to adjust their balance sheets through their dividend. Copyright 2003 Blackwell Publishing Ltd.
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Bibliographic InfoArticle provided by Department of Economics, University of Oxford in its journal Oxford Bulletin of Economics & Statistics.
Volume (Year): 65 (2003)
Issue (Month): 5 (December)
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Other versions of this item:
- Andrew Benito & Garry Young, 2001. "Hard Times or Great Expectations?: Dividend omissions and dividend cuts by UK firms," Bank of England working papers 147, Bank of England.
- Benito, Andrew & Garry Young, 2002. "Hard Times or Greatr Expectations?: Dividend Omissions and Dividend Cuts by UK Firms," Royal Economic Society Annual Conference 2002 21, Royal Economic Society.
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