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http://dx.doi.org/10.14400/JDC.2014.12.3.149

Effect of Dividend Policy on the New Issue Announcement Effects  

Lee, Young-Hwan (Dept. of Business Administr ation, Kumoh National Institute of Technology)
Yoon, Hong-Geun (Gumi Electronics & Information Technology Research Institute)
Ahn, Byung-Hwa (Gumi Electronics & Information Technology Research Institute)
Publication Information
Journal of Digital Convergence / v.12, no.3, 2014 , pp. 149-160 More about this Journal
Abstract
This paper analyses whether change in corporate dividend policy affects the new issue announcement effects. By conducting an event study using 683 new equity announcements data from year 2000 to year 2009, we find firms paying more dividends experience relatively negative announcement effects of seasoned equity offerings comparing with firms paying less dividend. The cross sectional regression analysis results confirm our findings. These results indicate that corporate dividend policy change may interact with forthcoming new equity announcement decision, which may result in a negative signal to the capital markets.
Keywords
Corporate dividend policy; New equity announcement effects; Asymmetric information; Adverse selection; Investment opportunity;
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Times Cited By KSCI : 2  (Citation Analysis)
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