https://scholars.lib.ntu.edu.tw/handle/123456789/631122
Title: | An examination of the free cash flow and information/signaling hypotheses using unexpected dividend changes inferred from option and stock prices: The case of regular dividend increases | Authors: | SHENG-SYAN CHEN Fu, Kuei Chin |
Keywords: | Free cash flow hypothesis | Information/signaling hypothesis | Regular dividend | Unexpected dividend changes | Issue Date: | 1-Sep-2011 | Journal Volume: | 14 | Journal Issue: | 3 | Start page/Pages: | 563 - 600 | Source: | Review of Pacific Basin Financial Markets and Policies | Abstract: | This paper measures unexpected dividend changes in testing the free cash flow and information/signaling hypotheses using the BarYosef/Sarig method. The empirical findings reveal the following: (i) The association between announcement period abnormal returns and the cash level is significantly positive for low q firms; (ii) The positive association between announcement period, abnormal returns, and the cash level is stronger in low q than in high q firms for most regressions; (iii) Low q firms reduce their capital and research and development (R&D) expenditures during the four fiscal years following dividend increase announcements. Our results are consistent with the free cash flow hypothesis. © 2011 World Scientific Publishing Co. and Center for Pacific Basin Business, Economics and Finance Research. |
URI: | https://scholars.lib.ntu.edu.tw/handle/123456789/631122 | ISSN: | 02190915 | DOI: | 10.1142/S0219091511002329 |
Appears in Collections: | 財務金融學系 |
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