Interpreting Ex Dividend Evidence PDF Download
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| Author | : James M. Poterba |
| Publisher | : |
| Total Pages | : |
| Release | : 1986 |
| Genre | : |
| ISBN | : |
Download Interpreting Ex-Dividend Evidence Book in PDF, ePub and Kindle
Numerous empirical studies have attempted to measure the effect of changes in dividend policy on corporate equity values. One of the most popular study methodologies has been an examination of share price changes around ex-dividend days. Comparing the movement in a stock's price with its nominal dividend payment leads to estimates of the stock market's relative valuation of dividends and capital gains. Ex-day price studies are often interpreted as showing that investors recognize their tax liabilities and therefore discount their dividend income. These studies predict that firms which reduce their payout ratio shouldrise in value, and buttress the view that an increase in dividend taxes would reduce the value of the stock market.This study disputes these conclusions by presenting a "counterexample" which suggests that ex-dividend day studies provide limited insight into the effects of dividend taxes, or dividend policy, on corporate valuation. I analyze a firm with two different classes of common stock: one class pays taxable cash dividends, while the other pays untaxed stock dividends. On ex dividend days, the taxable-dividend shares experience a price decline equal to about seventy five percent of their dividend payment, while the untaxed stock distribution shares fall by the full value of their dividends. However, the prices of the two classes of equity do not reflect this apparent market preference for non-taxable distributions. The average price of taxable-dividend shares is approximately equal to that of the untaxed dividend shares, indicating that the market considers the two shares as equivalent. These findings are important for several reasons. First, they cast doubt on earlier conclusions, based on ex-dividend day studies, about how a change individend taxes or payout policy would affect the market value of equity capital. Second, the results may provide new insights which help to explain why firms pay dividends.They deny the view that investors hold dividend paying stocks only becau
| Author | : Dan W. French |
| Publisher | : |
| Total Pages | : 44 |
| Release | : 2002 |
| Genre | : |
| ISBN | : |
Download Decimalization and the Ex-Dividend Behavior of Stock Prices Book in PDF, ePub and Kindle
In this paper, we examine changes in the behavior of ex-dividend stock prices when the exchanges changed from pricing stocks in discrete intervals to decimal pricing. Based on prior models of ex-dividend behavior and price discreteness of Dubofsky and of Bali and Hite, we anticipate that the move to trading in decimals would decrease the variance of returns on all exchanges and increase the level of ex-dividend-day returns on the NYSE while reducing them on the Amex and Nasdaq.Our sample of ex-dividend-day returns covers periods slightly longer than one year before and after decimalization. For the overall sample and for each of the individual exchanges (Amex, Nasdaq and NYSE), the variances of ex-dividend returns experience a significant decrease after decimalization while the mean returns increase by a positive and significant amount. To account for the increase in ex-day returns on the Amex and Nasdaq, we develop an alternative model to explain the effect of discreteness on ex-day returns. Tests of the three models (Dubofsky's, Bali and Hite's, and ours) indicate that prior to decimalization, as expected, Dubofsky's model is better for explaining NYSE ex-day returns and ours fits the Nasdaq better. Bali and Hite's model, however, is unable to explain any of the pre-decimalization ex-day returns, including those of the Nasdaq where the Bali-Hite model might provide a reasonable description of ex-day market behavior. After decimalization, ex-dividend-day returns do not appear to follow either the scenario described by Dubofsky or by us. The most likely cause of this is that traders in the market are placing ex-dividend-day orders with limits somewhere between prices indicated by Dubofsky and by us.We also provide evidence that ex-dividend returns attributable to factors other than discreteness and the dividend yield actually declined following decimalization. Since the most obvious factor is transactions costs, we interpret this to be evidence of a reduction in ex-day returns caused by a reduction in transactions costs. We also find that the dividend yield is a significant influence on ex-dividend-day returns.
| Author | : Ken M. Eades |
| Publisher | : |
| Total Pages | : 40 |
| Release | : 1982 |
| Genre | : Stocks |
| ISBN | : |
Download On Interpreting Security Returns During the Ex-dividend Period Book in PDF, ePub and Kindle
| Author | : |
| Publisher | : |
| Total Pages | : |
| Release | : 2005 |
| Genre | : |
| ISBN | : |
Download Ex-dividend Stock Price Behavior Book in PDF, ePub and Kindle
| Author | : Sarin Anantarak |
| Publisher | : |
| Total Pages | : 128 |
| Release | : 2011 |
| Genre | : Dividends |
| ISBN | : |
Download Economic Motivation of the Ex-dividend Day Anomaly Book in PDF, ePub and Kindle
| Author | : Shishir K. Paudel |
| Publisher | : |
| Total Pages | : 46 |
| Release | : 2014 |
| Genre | : |
| ISBN | : |
Download Ex-Dividend Day Stock Price Behavior - The NASDAQ Evidence Book in PDF, ePub and Kindle
We use dividend-paying Nasdaq-listed firms as a setting to test various explanations of the ex-day price anomaly. Similar to NYSE-listed firms, on average the prices of Nasdaq-listed firms drop by less than the dividend amount on the ex-day. However, the average price-drop is half that observed for NYSE-listed firms and translates to an imputed dividend tax rate that is double the average maximum tax rate over the sample period. In addition, we find the ex-day price-drop increases in dividend yield, opposite the prediction from a tax clientele explanation. Moreover, for non-taxable distributions we find prices behave in a similar manner to taxable distributions on the ex-day, again suggesting taxes are not the primary reason for the price behavior. In sum, we find little support for tax-based explanations. We also find little support for short-term trading and market microstructure explanations. Importantly, our results are robust to transaction costs as proxied by stock price, liquidity, volatility, firm size and bid-ask spread. We supplement our analysis by investigating a subset of firms that voluntarily switch from the Nasdaq exchange to the NYSE. The average price-drop for the switching firms is similar to the Nasdaq average prior to the switch and resembles the NYSE average immediately after the switch. This change in price behavior potentially reflects a changing investor base and suggests the marginal investor of Nasdaq dividend-paying firms places relatively less importance on dividends. Overall, our results call into question the various explanations of the ex-day anomaly. Any potential explanation also needs to account for the Nasdaq evidence.
| Author | : H. Kent Baker |
| Publisher | : John Wiley & Sons |
| Total Pages | : 832 |
| Release | : 2009-04-27 |
| Genre | : Business & Economics |
| ISBN | : 0470471220 |
Download Dividends and Dividend Policy Book in PDF, ePub and Kindle
Dividends And Dividend Policy As part of the Robert W. Kolb Series in Finance, Dividends and Dividend Policy aims to be the essential guide to dividends and their impact on shareholder value. Issues concerning dividends and dividend policy have always posed challenges to both academics and professionals. While all the pieces to the dividend puzzle may not be in place yet, the information found here can help you gain a firm understanding of this dynamic discipline. Comprising twenty-eight chapters—contributed by both top academics and financial experts in the field—this well-rounded resource discusses everything from corporate dividend decisions to the role behavioral finance plays in dividend policy. Along the way, you'll gain valuable insights into the history, trends, and determinants of dividends and dividend policy, and discover the different approaches firms are taking when it comes to dividends. Whether you're a seasoned financial professional or just beginning your journey in the world of finance, having a firm understanding of the issues surrounding dividends and dividend policy is now more important than ever. With this book as your guide, you'll be prepared to make the most informed dividend-related decisions possible—even in the most challenging economic conditions. The Robert W. Kolb Series in Finance is an unparalleled source of information dedicated to the most important issues in modern finance. Each book focuses on a specific topic in the field of finance and contains contributed chapters from both respected academics and experienced financial professionals.
| Author | : Bjørn Espen Eckbo |
| Publisher | : Elsevier |
| Total Pages | : 605 |
| Release | : 2011-10-13 |
| Genre | : Business & Economics |
| ISBN | : 0080932118 |
Download Handbook of Empirical Corporate Finance Book in PDF, ePub and Kindle
This second volume of a two-part series examines three major topics. First, it devotes five chapters to the classical issue of capital structure choice. Second, it focuses on the value-implications of major corporate investment and restructuring decisions, and then concludes by surveying the role of pay-for-performance type executive compensation contracts on managerial incentives and risk-taking behavior. In collaboration with the first volume, this handbook takes stock of the main empirical findings to date across an unprecedented spectrum of corporate finance issues. The surveys are written by leading empirical researchers that remain active in their respective areas of interest. With few exceptions, the writing style makes the chapters accessible to industry practitioners. For doctoral students and seasoned academics, the surveys offer dense roadmaps into the empirical research landscape and provide suggestions for future work. Nine original chapters summarize research advances and future topics in the classical issues of capital structure choice, corporate investment behavior, and firm value Multinational comparisons underline the volume's empirical perspectives Complements the presentation of econometric issues, banking, and capital acquisition research covered by Volume 1
| Author | : George M. Constantinides |
| Publisher | : Newnes |
| Total Pages | : 859 |
| Release | : 2013-02-08 |
| Genre | : Business & Economics |
| ISBN | : 0444535950 |
Download Handbook of the Economics of Finance Book in PDF, ePub and Kindle
In the 11 articles in this first of two parts, top scholars summarize and analyze recent scholarship in corporate finance. Covering subjects from corporate taxes to behavioral corporate finance and econometric issues, their articles reveal how specializations resonate with each other and indicate likely directions for future research. By including both established and emerging topics, Volume 2 will have the same long shelf life and high citations that characterize Volume 1 (2003). Presents coherent summaries of major finance fields, marking important advances and revisions Describes the best corporate finance research created about the 2008 financial crises Exposes readers to a wide range of subjects described and analyzed by the best scholars
| Author | : George M. Constantinides |
| Publisher | : Newnes |
| Total Pages | : 1732 |
| Release | : 2013-01-21 |
| Genre | : Business & Economics |
| ISBN | : 0444594655 |
Download Handbook of the Economics of Finance SET:Volumes 2A & 2B Book in PDF, ePub and Kindle
This two-volume set of 23 articles authoritatively describes recent scholarship in corporate finance and asset pricing. Volume 1 concentrates on corporate finance, encompassing topics such as financial innovation and securitization, dynamic security design, and family firms. Volume 2 focuses on asset pricing with articles on market liquidity, credit derivatives, and asset pricing theory, among others. Both volumes present scholarship about the 2008 financial crisis in contexts that highlight both continuity and divergence in research. For those who seek insightful perspectives and important details, they demonstrate how corporate finance studies have interpreted recent events and incorporated their lessons. Covers core and newly-developing fields Explains how the 2008 financial crises affected theoretical and empirical research Exposes readers to a wide range of subjects described and analyzed by the best scholars
