You are not currently logged in.
Access your personal account or get JSTOR access through your library or other institution:
If You Use a Screen ReaderThis content is available through Read Online (Free) program, which relies on page scans. Since scans are not currently available to screen readers, please contact JSTOR User Support for access. We'll provide a PDF copy for your screen reader.
Dividend Initiations and Earnings Surprises
Marc L. Lipson, Carlos P. Maquieira and William Megginson
Vol. 27, No. 3, Special Issue: Dividends (Autumn, 1998), pp. 36-45
Stable URL: http://www.jstor.org/stable/3666273
Page Count: 10
Since scans are not currently available to screen readers, please contact JSTOR User Support for access. We'll provide a PDF copy for your screen reader.
Preview not available
This paper examines the performance of newly public firms and compares those firms that initiated dividends with those that did not. Earnings increases following the dividend initiation and earnings surprises for initiating firms are more favorable than those for noninitiating firms. Furthermore, had noninitiating firms declared dividends that matched the dividend yield, dividend-to-sales ratio, or dividend-to-assets ratio of initiating firms, the promised dividend would have equaled about 8.5% of earnings, significantly above the 0.05 level for initiating firms. In contrast to DeAngelo, DeAngelo, and Skinner (1996), these results suggest that dividends signal differences in performance between otherwise comparable firms.
Financial Management © 1998 Financial Management Association International