Advanced

Dividend Signals and Voluntary Disclosure

Brigg Gjesdal, Jens-Petter and Dackerud, Henrik LU (2016) BUSN89 20161
Department of Business Administration
Abstract
This study examines whether a change in dividends is connected with a change in future earnings and can thereby be interpreted as a signal from the management to the market. This is a well-debated subject that has been researched several times before this study, often with contradicting results. This thesis presents a new approach where it is investigated if firms choose between different ways to convey information to the market by adding the variable of voluntary disclosure. By doing this the thesis aims to investigate if the dividend of firms with a higher level of voluntary disclosure have a lower signalling value and thereby are less usable to predict future earnings. The sample consists of Swedish firms listed on Large Cap, Mid Cap,... (More)
This study examines whether a change in dividends is connected with a change in future earnings and can thereby be interpreted as a signal from the management to the market. This is a well-debated subject that has been researched several times before this study, often with contradicting results. This thesis presents a new approach where it is investigated if firms choose between different ways to convey information to the market by adding the variable of voluntary disclosure. By doing this the thesis aims to investigate if the dividend of firms with a higher level of voluntary disclosure have a lower signalling value and thereby are less usable to predict future earnings. The sample consists of Swedish firms listed on Large Cap, Mid Cap, Small Cap and the Nordic Growth Market. Several models is used to investigate the relation between dividends and future earnings. The sample is then divided into three segments after level of voluntary disclosure and same models are then applicated these segments. This approach is also supplemented by a multiplicative interaction model. The results of this research showed that no clear connection could be proven and a change in dividend therefore can’t be seen as a credible signal of future earnings. Further no convincing evidence for whether dividends and voluntary disclosure was used side by side or instead of each other was found. (Less)
Please use this url to cite or link to this publication:
author
Brigg Gjesdal, Jens-Petter and Dackerud, Henrik LU
supervisor
organization
alternative title
A new approach from Sweden
course
BUSN89 20161
year
type
H1 - Master's Degree (One Year)
subject
keywords
Dividend signalling, information asymmetry, corporate disclosure
language
English
id
8887572
date added to LUP
2016-08-22 12:43:14
date last changed
2016-08-22 12:43:14
@misc{8887572,
  abstract     = {This study examines whether a change in dividends is connected with a change in future earnings and can thereby be interpreted as a signal from the management to the market. This is a well-debated subject that has been researched several times before this study, often with contradicting results. This thesis presents a new approach where it is investigated if firms choose between different ways to convey information to the market by adding the variable of voluntary disclosure. By doing this the thesis aims to investigate if the dividend of firms with a higher level of voluntary disclosure have a lower signalling value and thereby are less usable to predict future earnings. The sample consists of Swedish firms listed on Large Cap, Mid Cap, Small Cap and the Nordic Growth Market. Several models is used to investigate the relation between dividends and future earnings. The sample is then divided into three segments after level of voluntary disclosure and same models are then applicated these segments. This approach is also supplemented by a multiplicative interaction model. The results of this research showed that no clear connection could be proven and a change in dividend therefore can’t be seen as a credible signal of future earnings. Further no convincing evidence for whether dividends and voluntary disclosure was used side by side or instead of each other was found.},
  author       = {Brigg Gjesdal, Jens-Petter and Dackerud, Henrik},
  keyword      = {Dividend signalling,information asymmetry,corporate disclosure},
  language     = {eng},
  note         = {Student Paper},
  title        = {Dividend Signals and Voluntary Disclosure},
  year         = {2016},
}