Earnings and Dividend Informativeness When Cash Flow Rights are Separated from Voting Rights

  title={Earnings and Dividend Informativeness When Cash Flow Rights are Separated from Voting Rights},
  author={Jennifer Francis and Katherine Schipper},
We investigate the relative informativeness of earnings and dividends for firms with dual class capital structures. In these firms, two classes of common stock create a separation between cash flow rights and voting rights. Despite the concentrated ownership in the dual class firms, we find significantly lower informativeness of earnings, in the form of a weaker returns-earnings association, than for single class stocks. We attribute this finding to the reduced management accountability… CONTINUE READING
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