Do Dividends Convey Information About Future Earnings?

@article{Ham2019DoDC,
  title={Do Dividends Convey Information About Future Earnings?},
  author={Charles (Chad) Ham and Zachary R. Kaplan and Mark T. Leary},
  journal={Corporate Finance: Capital Structure \& Payout Policies eJournal},
  year={2019}
}
Yes. We show that dividend changes contain information about highly persistent changes in future economic income. Three methodological differences lead us to different conclusions from the extant literature: (i) we use an “event window approach” to cleanly delineate earnings after dividend changes from those before, (ii) we use alternative earnings measures to control for endogenous investment and asset write-downs surrounding dividend changes and (iii) we control for the non-linear relation… Expand
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This article examines potential explanations for the wealth effects surrounding dividend change announcements. We find that new information concerning managers' investment policies is not revealed atExpand
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