search query: @author Litzenberger, R. H. / total: 13
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| Author: | Lang, L. H. P. Litzenberger, R. H. |
| Title: | Dividend announcements. Cash flow signalling vs. free cash flow hypothesis? |
| Journal: | Journal of Financial Economics
1989 : SEP, VOL. 24:1, p. 181-191 |
| Index terms: | DIVIDENDS CASH FLOW SHARE PRICES BUSINESS INFORMATION |
| Language: | eng |
| Abstract: | The cash flow signalling and free cash flow/overinvestment explanations of the impact of dividend announcements on stock prices are tested. Tobin's Q ratios less than unity are used to designate overinvestors. The average return associated with announcements of large dividend changes is significantly larger for firms with Q's less than unity than for other firms. The evidence supports the overinvestment hypothesis over the cash flow signalling hypothesis. |
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