dividends, share prices, event study banking relationship with SME´s due to international accounting standards
Abstract
The empirical evidence concerning the analysis of the market reaction to dividend change announcements is not consensual. Thus, we intend to test whether this kind of news has a significant impact on the respective share prices, as well as in its future earnings, considering three European countries. Additionally, we analyzed the extent to which some specific variables are crucial for companies to pay dividends.Globally, we found no evidence that dividend announcements affect the shares price, at least significantly. Regarding the relationship between the dividend change announcements and the firms’ future performance, measured by the earnings changes, we find evidence of this effect for only one of the countries analyzed.Finally, we found that there are some specific variables influencing the payout ratio, such as net income, return on equity and debt level.
