Universität zu Köln

Homburg, Carsten, Mueller, Christian and Nasev, Julia (2018). How Important are Dividend Signals in Assessing Earnings Persistence? Contemp. Account. Res., 35 (4). S. 2082 - 2106. HOBOKEN: WILEY. ISSN 1911-3846

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Abstract

We build and test a Bayesian model that shows how investors revise their earnings persistence expectations after dividend announcements. When dividend changes confirm preceding earnings changes, our model predicts inverse u-shaped investor revisions conditional on the prior expectations for noisy dividend signals. As the dividend signal becomes more informative, our model predicts that investor revisions will become more skewed converging to a monotonically decreasing relation for perfectly informative dividend signals. When dividend changes contradict preceding earnings changes, our model predicts u-shaped investor revisions. In empirical tests, we find results generally consistent with our model predictions.

Item Type:	Journal Article
Creators:	Creators Email ORCID ORCID Put Code Homburg, Carsten UNSPECIFIED UNSPECIFIED UNSPECIFIED Mueller, Christian UNSPECIFIED UNSPECIFIED UNSPECIFIED Nasev, Julia UNSPECIFIED UNSPECIFIED UNSPECIFIED
URN:	urn:nbn:de:hbz:38-163584
DOI:	10.1111/1911-3846.12443
Journal or Publication Title:	Contemp. Account. Res.
Volume:	35
Number:	4
Page Range:	S. 2082 - 2106
Date:	2018
Publisher:	WILEY
Place of Publication:	HOBOKEN
ISSN:	1911-3846
Language:	English
Faculty:	Unspecified
Divisions:	Unspecified
Subjects:	no entry
Uncontrolled Keywords:	Keywords Language ACCOUNTING EARNINGS; INFORMATION-CONTENT; POLICY Multiple languages Business, Finance Multiple languages
Refereed:	Yes
URI:	http://kups.ub.uni-koeln.de/id/eprint/16358