Cash Dividends (cash + dividend)

Distribution by Scientific Domains


Selected Abstracts


Dividend preference of tradable-share and non-tradable-share holders in Mainland China

ACCOUNTING & FINANCE, Issue 2 2009
Louis T. W. Cheng
Stock dividend; Cash dividend; Non-tradable share; Dividend signal Abstract Comprehensive data on corporate announcements of Chinese firms allows us to examine the preference for, and determinants of, cash and stock dividends. The results indicate that Chinese public investors prefer stock dividends over cash dividends, which are preferred by large state and legal person shareholders generally. Stock dividends, which do not require an explicit cash outflow from a firm, are found to be positively related to higher earnings, supporting the signalling hypothesis of dividend policy. In an imperfect market, these results have some implications for government regulation of financial markets. [source]


WHAT DO WE KNOW ABOUT STOCK REPURCHASES?

JOURNAL OF APPLIED CORPORATE FINANCE, Issue 1 2000
Gustavo Grullon
Stock repurchases by U.S. companies experienced a remarkable surge in the 1980s and ,90s. Indeed, in 1998, the total value of all stock repurchased by U.S. companies exceeded for the first time the total amount paid out as cash dividends. And the U.S. repurchase movement has gone global in the past few years, spreading not only to Canada and the U.K., but also to countries like Japan and Germany, where such transactions were prohibited until recently. Why are companies buying back their stock in such amounts? After dismissing the popular argument that stock repurchases boost earnings per share, the authors argue that repurchases serve to add value in two main ways: (1) they provide managers with a tax-efficient means of returning excess capital to shareholders and (2) they allow managers to "signal" to investors their view that the firm is undervalued. Returning excess capital is value-adding for two reasons: First, it helps prevent companies from pursuing growth and size at the expense of profitability and value. Second, by returning capital to investors, repurchases (like dividends) play the critically important economic function of allowing investors to channel their investment from mature or declining sectors of the economy to more promising ones. But if stock repurchases and dividends serve the same basic economic function, why are repurchases growing more rapidly? Part of the explanation is that, because repurchases are taxed as capital gains and dividends as ordinary income, repurchases are a more tax-efficient way of distributing excess capital. But perhaps even more important than their tax treatment is the flexibility that (at least) open market repurchases provide corporate managers-flexibility to make small adjustments in capital structure, to exploit (or correct) perceived undervaluation of the firm's shares, and possibly even to increase the liquidity of the stock, which could be particularly valuable in bear markets. For U.S. regulators, the growth in open market stock repurchases raises some interesting issues. Perhaps most important, companies are not required to (and rarely do) furnish their investors with details about a given program's structure, execution method, number of shares repurchased, or even its duration. Policy regulators (and corporate executives as well) should consider some of the benefits provided by other systems, notably Canada's, which provide greater transparency and more guidelines for the repurchase process. [source]


The Effects of Pre-issue Information Releases on Seasoned Equity Offerings

JOURNAL OF BUSINESS FINANCE & ACCOUNTING, Issue 9-10 2008
Yi-Mien Lin
Abstract:, Because of information asymmetry, managers tend to make pre-issue disclosures to reduce the costs of seasoned equity offerings. This paper discusses whether pre-issue information releases of major investments, financial forecast revisions and dividends help the investors to anticipate seasoned equity offerings and assist in reducing the information asymmetry when the managers announce equity issues. We analyze price and trading volume reactions to equity issue announcements to infer the degree of information asymmetry. Consistent with our expectations, we find that these three types of pre-issue disclosures can help investors to anticipate equity issues. However, after controlling for anticipation and cross-sectional variation in uncertainty, we find none of the disclosures are capable of reducing the price drop at issue announcement, and only the disclosures of increased cash dividends have the effect of reducing the negative trading volume reactions. In addition, both the price and trading volume reactions are not related to the intervals between the disclosures and the issue announcements. [source]


IMPACT OF DIVIDEND-PROTECTED EMPLOYEE STOCK OPTIONS ON PAYOUT POLICIES: EVIDENCE FROM TAIWAN

PACIFIC ECONOMIC REVIEW, Issue 4 2008
Ming-Cheng Wu
Abstract. This study used a sample of 1035 Taiwanese firms to examine the impact of dividend protected employee stock options on stock repurchase and cash dividend policies from 2000 to 2005. This study finds a positive relationship between cash dividends and executive options, implying that executives holding stock options might prefer to distribute cash dividends to boost the stock price. This result, unlike in earlier studies, arises from the dividend protected characteristic of Taiwanese employee stock options. Finally, free cash flow, firm profitability, level of debt, investment opportunities and firm size are found to considerably influence payout decisions. [source]