The information content of cash dividend announcements in a unique environment

Al-Yahyaee, KH; Pham, TM; Walter, TS

The information content of cash dividend announcements in a unique environment

Al-Yahyaee, KH Pham, TM Walter, TS

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Publication Type:: Journal Article
Citation:: Journal of Banking and Finance, 2011, 35 (3), pp. 606 - 612
Issue Date:: 2011-03-01

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Field	Value	Language
dc.contributor.author	Al-Yahyaee, KH	en_US
dc.contributor.author	Pham, TM	en_US
dc.contributor.author	Walter, TS	en_US
dc.date.issued	2011-03-01	en_US
dc.identifier.citation	Journal of Banking and Finance, 2011, 35 (3), pp. 606 - 612	en_US
dc.identifier.issn	0378-4266	en_US
dc.identifier.uri	http://hdl.handle.net/10453/17493
dc.description.abstract	Due to its distinctive institutional background, Oman offers a valuable opportunity to examine stock price reactions to dividend announcements. In Oman, (1) there are no taxes on dividends and capital gains, (2) there is a high concentration of share ownership, (3) there is low corporate transparency, and (4) firms frequently change their dividends. Our results show that announcements of dividend increases are associated with increased stock prices, while announcements of dividend decreases cause decreases in stock prices. Firms that do not change their dividends experience insignificant negative returns. These results contradict tax-based signaling models, which argue that higher taxes on dividends relative to capital gains are a necessary condition for dividends to be informative. © 2010 Elsevier B.V.	en_US
dc.relation.ispartof	Journal of Banking and Finance	en_US
dc.relation.isbasedon	10.1016/j.jbankfin.2010.03.004	en_US
dc.subject.classification	Finance	en_US
dc.title	The information content of cash dividend announcements in a unique environment	en_US
dc.type	Journal Article
utslib.citation.volume	3	en_US
utslib.citation.volume	35	en_US
utslib.for	1502 Banking, Finance and Investment	en_US
utslib.for	0102 Applied Mathematics	en_US
utslib.for	1401 Economic Theory	en_US
pubs.embargo.period	Not known	en_US
pubs.organisational-group	/University of Technology Sydney
pubs.organisational-group	/University of Technology Sydney/Faculty of Business
utslib.copyright.status	closed_access
pubs.issue	3	en_US
pubs.publication-status	Published	en_US
pubs.volume	35	en_US

Abstract:

Due to its distinctive institutional background, Oman offers a valuable opportunity to examine stock price reactions to dividend announcements. In Oman, (1) there are no taxes on dividends and capital gains, (2) there is a high concentration of share ownership, (3) there is low corporate transparency, and (4) firms frequently change their dividends. Our results show that announcements of dividend increases are associated with increased stock prices, while announcements of dividend decreases cause decreases in stock prices. Firms that do not change their dividends experience insignificant negative returns. These results contradict tax-based signaling models, which argue that higher taxes on dividends relative to capital gains are a necessary condition for dividends to be informative. © 2010 Elsevier B.V.

Please use this identifier to cite or link to this item:

http://hdl.handle.net/10453/17493