What insight do market participants gain from dividend increases?
Description:
This study examines the reactions of market makers and investors to large dividend increases to identify the motives for dividend increases. Uniquely, this study simultaneously tests the signaling and agency abatement motivations as explanations of the impact of dividend increases on stock prices and bid-ask spreads. The agency abatement hypothesis argues that increased dividends constrict management's future behavior, abating the agency problem with shareholders. The signaling hypothesis asser…
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Date:
May 2000
Creator:
Ellis, R. Barry
Partner:
UNT Libraries