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|title: ||Signalling with dividends? new evidence from Europe|
|authors: ||Vieira, Elisabete F. Simões|
Raposo, Clara C.
|keywords: ||Cash Dividends, Maturity Hypothesis, Signalling Hypothesis|
|issue date: ||2007|
|abstract: ||According to the dividend signalling hypothesis, dividend change announcements
trigger share returns because they convey information about management’s assessment
on firms’ future prospects.
We analyse the classical assumptions of the dividend signalling hypothesis, using data
from three European countries. The evidence gives no support to a positive relation
between dividend change announcements and the market reaction for French firms, and
only weak support for the Portuguese and UK firms. After accounting for non-linearity
in the mean reversion process, the global results do not give support to the assumption
that dividend change announcements are positively related with future earnings
We also formulate two hypotheses in order to explore the window dressing phenomenon
and the maturity hypothesis, finding some evidence in favour of both, especially in the
|appears in collections||ISCA - Working paper|
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