Balachandran, Balasingham and Krishnamurti, Chandrasekhar and Theobald, Michael and Vidanapathirana, Berty (2012) Dividend reductions, the timing of dividend payments and information content. Journal of Corporate Finance, 18 (5). pp. 1232-1247. ISSN 0929-1199
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Identification Number or DOI: doi: 10.1016/j.jcorpfin.2012.08.002
Australian companies pay dividends semi-annually with smaller 'interim' payments and larger 'final' payments. Interim dividends are declared and paid within a less full information environment than final dividends. We analyze the interactions between the timing of dividends and their information content, controlling for share repurchase and tax effects. Dividend reductions that are not associated with share repurchases are statistically significantly related to future abnormal earnings and provide strong support for the information content of dividend reductions. The percentage of dividend reduction is stronger for interim than for final dividend reductions. The market reaction is negatively related to the reduction in imputation tax credit and reacts more aggressively and negatively to interim as compared to final dividend reductions.
|Item Type:||Article (Commonwealth Reporting Category C)|
|Additional Information:||Permanent restricted access to published version due to publisher copyright policy (Elsevier)|
|Uncontrolled Keywords:||Australia; dividend reductions; franked and unfranked; information content; interim and final; price reactions|
|Fields of Research (FOR2008):||15 Commerce, Management, Tourism and Services > 1501 Accounting, Auditing and Accountability > 150107 Taxation Accounting|
15 Commerce, Management, Tourism and Services > 1502 Banking, Finance and Investment > 150205 Investment and Risk Management
14 Economics > 1402 Applied Economics > 140207 Financial Economics
|Socio-Economic Objective (SEO2008):||B Ecomonic Development > 90 Commercial Services and Tourism > 9001 Financial Services > 900102 Investment Services (excl. Superannuation)|
|Deposited On:||17 Sep 2012 21:12|
|Last Modified:||30 Nov 2012 14:15|
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