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The pricing of dividend consistency

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Abstract

This study investigates the pricing of dividend consistency. The approach used is to study the announcement effects around significant dividend changes; specifically dividend omissions, resumptions, and increases or decreases of 25% or more. We focus on the relation between the magnitude of the announcement effect and the firm's history of dividend payment consistency using an ARIMA model. We find that dividend consistency is not priced.

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Authors and Affiliations

  1. Department of Business Administration, Californic Polytechnic State University, 93497, San Luis Obispo, CA

    John Dobson & W. Tawarangkoon

  2. School of Business and Economics, Indiana University Southeast, 47150, New Albany, IN

    Uric Dufrene

Authors
  1. John Dobson
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  2. W. Tawarangkoon
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  3. Uric Dufrene
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Dobson, J., Tawarangkoon, W. & Dufrene, U. The pricing of dividend consistency. J Econ Finan 20, 47–61 (1996). https://doi.org/10.1007/BF02920891

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