Items related to Corporate Financial Decisions and Future Earnings Performanc...
Corporate Financial Decisions and Future Earnings Performance: The Case of Initiating Dividends (Classic Reprint) - Softcover
Synopsis
Excerpt from Corporate Financial Decisions and Future Earnings Performance: The Case of Initiating Dividends The impact of a firm's dividend policy on its value has been a subject of long-standing debate in the finance literature. In their seminal work, Miller and Modigliani (1961) show that, absent mark-imperfections, dividend policy should not affect shareholders' wealth. Contrary to this proposition, however, a number of recent empirical studies report a significant positive stock price reaction to corporate dividend announcements. Examples of such studies include Aharoney and Swary (1980), Asquith and Mullins (1983), and Brickley (1982). To account for the observed dividend announcement effect, Miller and Rock (1985) propose a modification to the Miller-Modigliani assumption that investors and managers possess the same information. Miller and Rock hypothesize that when managers know more than outside investors about the firm's current and future performance, dividends provide a vehicle for communicating management's superior information to the shareholders. In a world of rational expectations, the firm's dividend (or financing) announcements provide just enough pieces of the firm's sources and uses statements for the market to deduce the unobserved piece, to wit, the firm's current earnings. The market's estimate of current earnings contributes in turn to the estimate of the expected future earnings on which the firm's market value largely hinges. (p.1032) Ross (1977) and Bhattacharya (1979, 1980) also present asymmetric Information models in which dividends serve as signals of the firm's current and future expected performance. A number of researchers question the information signaling role of dividends. They suggest that cheaper and equally efficient alternatives exist for managers to communicate information to shareholders (for example, see Miller and Modigliani (1961), Pettit (1972), Black (1976), and Stern (1979)). About the Publisher Forgotten Books publis
"synopsis" may belong to another edition of this title.
About the Author
Paul M. Healy is James R. Williston Professor of Business Administration, and Unit Head, Accounting and Management, at Harvard Business School, Harvard University. Professor Healy joined Harvard Business School as a Professor of Business Administration in 1997. Professor Healy received his B.C.A. Honors (1st Class) in Accounting and Finance from Victoria University, New Zealand in 1977, his M.S. in Economics from the University of Rochester in 1981, his Ph.D. in Business from the University of Rochester in 1983, and is a New Zealand CPA. In New Zealand, Professor Healy worked for Arthur Young and ICI. Prior to joining Harvard, Professor Healy spent fourteen years on the faculty at the M.I.T. Sloan School of Management, where he received awards for teaching excellence in 1991, 1992, and 1997. He is the co-author of one of the leading financial analysis textbooks, Business Analysis & Valuation. In 1993-94 he served as Deputy Dean at the Sloan School, and in 1994-95 he visited London Business School and Harvard Business School. Professor Healy's research includes studies of the role and performance of financial analysts, how firms' disclosure strategies affect their costs of capital, the performance of merging firms after mergers, and managers' financial reporting decisions. His work has been published in The Accounting Review, Journal of Accounting and Economics, Journal of Accounting Research, and Journal of Financial Economics. In 1990, his article "The Effect of Bonus Schemes on Accounting Decisions," published in Journal of Accounting and Economics, was awarded the AICPA/AAA Notable Contribution Award. His text Business Analysis & Valuation was awarded the AICPA/AAA's Wildman Medal for contributions to the practice in 1997 and the AICPA/AAA Notable Contribution Award in 1998
"About this title" may belong to another edition of this title.
- PublisherForgotten Books
- Publication date2024
- ISBN 10 1330359380
- ISBN 13 9781330359389
- BindingPaperback
- Number of pages27
Buy New
Learn more about this copy
£ 13.22
Shipping:
FREE
From United Kingdom to U.S.A.
Other Popular Editions of the Same Title
Top Search Results from the AbeBooks Marketplace
Seller Image
Corporate Financial Decisions and Future Earnings Performance (Classic Reprint)
Print on DemandSeller: Forgotten Books, London, United Kingdom
Seller rating 5 out of 5 stars
Paperback. Condition: New. Print on Demand. This book examines the relationship between corporate financial decisions and future earnings performance, with a specific focus on the significance of dividend payments. The author analyzes data from firms that initiated dividends or resumed dividend payments after a hiatus, revealing that these companies experienced substantial earnings growth in the years following the dividend announcement. Moreover, the author finds a positive correlation between the magnitude of the dividend yield and the subsequent increase in earnings. These findings challenge traditional theories that suggest dividend policy has no bearing on a firm's value and instead provide support for the hypothesis that dividends serve as credible signals of a company's superior future performance. By demonstrating the informational value of dividend payments, this book offers valuable insights into corporate financial decision-making and its impact on earnings. Forgotten Books publishes hundreds of thousands of rare and classic books. This book is a reproduction of an important historical work. Forgotten Books uses state-of-the-art technology to digitally reconstruct the work, preserving the original format whilst repairing imperfections present in the aged copy. In rare cases, an imperfection in the original, such as a blemish or missing page, may be replicated in our edition. We do, however, repair the vast majority of imperfections successfully; any imperfections that remain are intentionally left to preserve the state of such historical works. The digital edition of all books may be viewed on our website before purchase. print-on-demand item. Seller Inventory # 9781330359389_0
Quantity: Over 20 available
Stock Image
Corporate Financial Decisions and Future Earnings Performance The Case of Initiating Dividends Classic Reprint
Seller: PBShop.store US, Wood Dale, IL, U.S.A.
Seller rating 5 out of 5 stars
PAP. Condition: New. New Book. Shipped from UK. Established seller since 2000. Seller Inventory # LX-9781330359389
Quantity: 15 available