When are dividend increases bad for corporate bonds?

Wei, Xiaoting; Truong, Cameron; Do, Viet

doi:10.1111/acfi.12441

Cited by 8 publications

(7 citation statements)

References 64 publications

Supporting

Mentioning

Contrasting

Order By: Relevance

“…ROA is measured by net profit after tax divided by total assets at balance date. Tobin's Q is measured by market value of the firm plus preference shares plus total debt divided by total assets (Wei et al ., 2020).…”

Section: Methodsmentioning

confidence: 99%

Employee disclosures in the grocery industry before the COVID‐19 pandemic

Kent

McCormack

Zunker

2021

Accounting & Finance

View full text Add to dashboard Cite

We provide evidence on the consumer staples industry's commitment and accountability to employees prior to the COVID‐19 pandemic by analysing their employee‐related disclosures in annual reports. A high level of disclosure exists from 2004 to 2019 with 93 percent of the industry disclosing some information about employees. The highest categories of disclosure are remuneration, health and safety, and training and development. We find that total disclosure is significantly related to having employee share ownership, a Big 4 auditor, a larger board of directors, a majority independent board, independent chair, an audit and nomination committee and higher ROA.

show abstract

Section: Methodsmentioning

confidence: 99%

Employee disclosures in the grocery industry before the COVID‐19 pandemic

Kent

McCormack

Zunker

2021

Accounting & Finance

View full text Add to dashboard Cite

show abstract

“…where X is earnings per share, R is stock returns, D is a dummy variable equal to one when R < 0 and zero otherwise, SIZE is firm size computed as the natural logarithm of total assets (Abu Bakar et al, 2020;Keshk et al, 2020), LEV is the leverage ratio, defined as total debts divided by total assets (Hsu et al, 2020), and MB is the market-to-book ratio (Wei et al, 2020). To estimate conservatism prior to the Covid-19 outbreak, all variables in Equation ( 1) are measured in the fiscal period ending before 1 January 2020.…”

Section: Measures Of Conditional Conservatismmentioning

confidence: 99%

Accounting conservatism and firm performance during the COVID‐19 pandemic

Cui

Kent

Kim

et al. 2021

Accounting & Finance

View full text Add to dashboard Cite

We explore whether firms with more conditionally conservative accounting practices have higher stock returns than other firms during the Covid‐19 outbreak. We find evidence that Chinese firms listed on the Shanghai and Shenzhen Stock Exchanges applying more conditionally conservative reporting have lower declines in stock return performance during the Covid‐19 outbreak relative to other firms. We also find that the beneficial role of conditional conservatism is higher when firms have greater information asymmetry following the Covid‐19 pandemic. Our results are robust to various model specifications with four different measures of conservatism and an alternative return window.

show abstract

“…Mrzyglod and Nowak (2017) report a similar positive association between dividend cut and stock price movement in Poland. Wei et al (2020) report varying price reactions in the bond market around dividend increase announcements. However, several empirical studies find little or no evidence of dividend changes predicting abnormal increases in earnings (Penman, 1983; Benartzi et al , 1997; DeAngelo et al , 2000; Grullon et al , 2002).…”

Section: Literature Reviewmentioning

confidence: 99%

Dividend reduction and stock price reaction in Indian market: is there a role of share repurchase?

Chatterjee

Tiwari²

2022

JIBR

View full text Add to dashboard Cite

Purpose This paper aims to analyze the stock price reaction because of dividend reduction (DR) announcements in the Indian equity market, controlling for share repurchases. Design/methodology/approach The sample comprises National Stock Exchange (NSE) 500 companies listed in the NSE Ltd. covering a time span from year 2009 to 2019. Using the event study methodology, the authors measure the impact of DR announcements on security prices around the event day. The authors also examine the price response to DRs at the interim stage versus the final stage and identify the factors that drive the decision to reduce dividends at the interim level versus final level. Findings The authors find that overall DR announcements negatively impact abnormal returns. Firms that experience stronger adverse price reaction following DR announcements resort to share repurchase in the same year to boost stock prices. The authors find that interim DRs create more negative price reactions than final DRs. Finally, firms experiencing lower levels of prior year earnings, firms with smaller sizes and overvalued firms tend to reduce dividends at the interim level instead of postponing the reduction to the final level. Originality/value This paper examines stock price reaction because of DR announcements of Indian firms. The sample comprises firms that reduce dividends with contemporaneous share repurchases as well as firms that reduce dividends without contemporaneous repurchase activity. To the best of the authors’ knowledge, studies on substitution effect of dividends with buyback in the context of Indian equity market are rare. Further, investigating the difference in stock price movement because of DRs at the interim level versus the final level is the unique contribution of this paper.

show abstract

When are dividend increases bad for corporate bonds?

Cited by 8 publications

References 64 publications

Employee disclosures in the grocery industry before the COVID‐19 pandemic

Employee disclosures in the grocery industry before the COVID‐19 pandemic

Accounting conservatism and firm performance during the COVID‐19 pandemic

Dividend reduction and stock price reaction in Indian market: is there a role of share repurchase?

Contact Info

Product

Resources

About