Abstract
dc:description.abstractSince the 1970s, dividends have not only become less common (Fama and French, 2001), they have become less sticky, too. Today, it is not uncommon for a firm to cease dividend payments within three years of initiation. I examine the differences between firms that continue to pay dividends for a long period of time after initiation and those that do not. Although investors do not distinguish between the two groups at the time of the dividend initiation announcement, the firms that pay over a long period of time experience superior operating performance in subsequent years. I construct a model that predicts, at the time of the initiation announcement, whether a firm is likely to pay dividends well into the future. My predictions also extend to performance; the firms that I predict to pay for a long period of time also outperform those whose payments I predict to be temporary. Thus, it appears that the relationship between dividend stickiness and long-run performance is not fully reflected in stock returns surrounding the announcements of dividend initiations.
Degree
thesis:*- Name thesis:degree_name
- Ph. D.
- Level thesis:degree_level
- doctoral
- Discipline thesis:degree_discipline
- Finance, Insurance, and Business Law
- Department dc:contributor.department
- Finance, Insurance, and Business Law
- Grantor dc:publisher
- Virginia Tech
- Year dc:date.issued
- 2006
Author and committee
dc:creator, dc:contributor.*- Author dc:creator
-
- Hobbs, Jeffrey
- Chair dc:contributor.committeechair
-
- Schneller, Meir I.
- Committee members dc:contributor.committeemember
-
- Kumar, Raman
- Shome, Dilip K.
- Gulen, Huseyin
Subjects
dc:subject × 3Rights
dc:rights- Statement dc:rights
-
- In Copyright
- Licence dc:rights.uri
Identifiers
dc:identifier.*- Dc Identifier Other
- etd-11072006-102402
- OAI identifier oai:identifier
- oai:vtechworks.lib.vt.edu:10919/29488