Publication Type
Journal Article
Version
acceptedVersion
Publication Date
3-2003
Abstract
We examine potential information transfers from companies that announce dividend omissions to their industry rivals. Specifically, we examine the abnormal stock returns and abnormal earnings forecast revisions of rivals after a company makes a dividend-omission announcement. Our results show negative and significant abnormal stock returns and negative and significant abnormal forecast revisions for rival companies in response to the announcement, and a significant and positive relation between the two. We conclude that a dividend-omission announcement transmits unfavorable information across the announcing company's industry that affects cash flow expectations and ultimately stock prices.
Discipline
Finance and Financial Management | Portfolio and Security Analysis
Research Areas
Finance
Publication
Journal of Financial Research
Volume
26
Issue
1
First Page
51
Last Page
64
ISSN
0270-2592
Identifier
10.1111/1475-6803.00044
Publisher
Wiley
Citation
CATON, Gary L.; GOH, Jeremy; and KOHERS, Ninon.
Dividend omissions and intraindustry information transfers. (2003). Journal of Financial Research. 26, (1), 51-64.
Available at: https://ink.library.smu.edu.sg/lkcsb_research/2205
Copyright Owner and License
Authors
Creative Commons License
This work is licensed under a Creative Commons Attribution-NonCommercial-No Derivative Works 4.0 International License.
Additional URL
https://doi.org/10.1111/1475-6803.00044