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Journal of Business and Management
ISSN: 2291-1995 (Print) ISSN: 2291-2002 (Online)
Volume 6 (2017), No. 1, Pages 1-18 |
DOI: 10.12735/jbm.v6n1p1 |
Dividend Policy and the Sensitivity of Firm Value to Dividend Announcements and Investment
Kyung Suh Park1 KyungJae Rhee1
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1Korea University, Seoul, Republic of Korea |
URL: https://doi.org/10.12735/jbm.v6n1p1
To Cite this Article 
Article Views: 269 Downloads: 174 Since deposited on 2017-12-01
AbstractWe investigate how investors react differently to dividend announcement depending on the level of dividend management, and find that the stock market reacts more favorably to dividend announcements by dividend managing firms than to those of non-dividend managing firms. In addition, it takes announcements of dividend reductions by non-dividend managing firms as good news, supporting our hypothesis that decreasing dividends by non-dividend managing firms are a signal of good investment opportunities, while this is not the case for dividend managing firms. We also confirm that the dividend announcement returns of non-dividend managing firms are significantly and positively related to their annual investment levels, while it is not the case for dividend managing firms. |
JEL Classifications: G11; G14; G32; G35 |
Keywords: dividend management; residual dividend policy; investments; dividend signaling; value of firms |
To Cite this Article: Park, K. S., & Rhee, K. J. (2017). Dividend policy and the sensitivity of firm value to dividend announcements and investment. Journal of Business and Management, 6(1), 1-18. https://doi.org/10.12735/jbm.v6n1p1 |
Copyright © K. S. Park & K. J. Rhee
This article is published under license to Science and Education Centre of North America. This is an Open Access article distributed under the terms of the Creative Commons Attribution 4.0 International License.
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