In recent years a major controversy has formed in the finance literature regarding the empirical evidence of the informational content of dividends. Despite considerable support for the position of dividend nontriviality by various studies, the work by Watts [13] represents a formidable challenge. Because of the close proximity of the firm's earnings and dividend announcement dates, the major issue of the dispute has centered on the identification and control of contemporaneous earnings information. In an attempt to settle this controversy, the present study evaluates and extends Watts' methodology.

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Cash concentration is the task of moving funds from depository banks into the central cash pool. It is useful to structure cash concentration by dividing it into two major problems––management and design. Management is the day-to-day operation of the cash concentration system once it is designed. Design is specifying the structure of the cash concentration system.