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Journal of Finance Vol. 56 No. 6 2001

Dividend Changes and Future Profitability

Doron Nissim; Amir Ziv

Columbia Business School

Abstract

We investigate the relation between dividend changes and future profitability, measured in terms of either future earnings or future abnormal earnings. Supporting “the information content of dividends hypothesis,” we find that dividend changes provide information about the level of profitability in subsequent years, incremental to market and accounting data. We also document that dividend changes are positively related to earnings changes in each of the two years after the dividend change.

DOI
10.1111/0022-1082.00400
Volume
56
Issue
6
Pages
2111-2133
Language
en
Sources
bibtex:phds-export.bib crossref openalex

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