Are certain dividend increases predictable? The effect of repeated dividend increases on market returns

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Show simple item record Neuhauser, Karyn en_US Walker, Scott en_US Michayluk, Dave en_US
dc.contributor.editor Anup Agrawal et al en_US 2012-02-02T11:11:40Z 2012-02-02T11:11:40Z 2010 en_US
dc.identifier 2010000481 en_US
dc.identifier.citation Michayluk David, Neuhauser Karyn, and Walker Scott 2010, 'Are certain dividend increases predictable? The effect of repeated dividend increases on market returns', , Financial Management Association, New York, USA, , pp. 1-38. en_US
dc.identifier.issn - en_US
dc.identifier.other E1 en_US
dc.description.abstract Positive abnormal returns around dividend increase announcements are well documented. The conventional explanation for these abnormal returns is that a dividend increase conveys favorable information about a firm?s prospects causing the stock price to increase in response to the announcement. This study offers a new perspective by studying a special group of firms that consistently increase their dividends each year. Abnormal returns around each dividend increase announcement are investigated based on the number of consecutive annual increases. In light of survey results that indicate firms endeavor to maintain steady dividend payments, one hypothesis is that after a certain number of dividend increases, a firm may develop a reputation as a ?dividend-increasing firm? and consequently the market will learn to anticipate future dividend increases. Consistent with this hypothesis, we find that abnormal returns are significantly positive for the first and second dividend increase. Returns are not significant for all other increases, with the exception of the ninth consecutive increase. Our results suggest that, by the third consecutive increase, the market has learned to expect further increases. Our findings are robust and provide further evidence that, consistent with other types of corporate announcements, the stock market reacts differently depending on the frequency of an action. en_US
dc.language en_US
dc.publisher Financial Management Association en_US
dc.relation.isbasedon en_US
dc.title Are certain dividend increases predictable? The effect of repeated dividend increases on market returns en_US
dc.parent Financial Management Association 2010 Meetings en_US
dc.journal.volume en_US
dc.journal.number en_US
dc.publocation New York, USA en_US
dc.identifier.startpage 1 en_US
dc.identifier.endpage 38 en_US BUS.School of Finance and Economics en_US
dc.conference Verified OK en_US
dc.for 150103 en_US
dc.personcode 995682 en_US
dc.personcode 0000026077 en_US
dc.personcode 930555 en_US
dc.percentage 100 en_US Financial Accounting en_US
dc.classification.type FOR-08 en_US
dc.edition en_US
dc.custom Financial Management Association Annual Meeting en_US 20101020 en_US
dc.location.activity New York, USA en_US
dc.description.keywords NA en_US
dc.staffid 930555 en_US

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