On the informational content of dividends, and dividend policy, under conditions of differential information.

摘要

The purpose of this study is to show the effect of dividends on expectations, and how management can use dividends to influence the relative significance of other information sets regarding the firm's permanent component of earnings. Moreover it is shown how current dividends could be incorporated in the valuation of a firm's common stock, and the existence of a dividend rule. It is shown why empirical findings which claim dividends to have systematically a greater significant impact than retained earnings on share prices, could be consistent with the "informational content of dividends" hypothesis, and that the target payout ratio is very important to the minimization of differential information. In that respect dividends may become a useful instrument in the hands of management to affect market expectations and perhaps the market value of the common stock. Moreover, we show that their impact is conditional on uncertainty, which implies that dividend policy has a great effect during periods of high volatility. This theoretical finding may explain findings of related empirical research.