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Dividend forecasts and dividend payments of initial public offerings-when zero means zero and no comment most likely also means zero

Version 2 2024-06-17, 06:01
Version 1 2014-10-27, 16:31
journal contribution
posted on 2024-06-17, 06:01 authored by W Dimovski, R Brooks
Managers often try to forecast dividends because as Brown et al. (2002)  suggest, dividends have cash flow implications for investors and are important signalling devices. This study analyses the dividend forecasts in the prospectuses of initial public offerings (IPOs) in Australia over the period 1994 to 1999. While many companies forecast dividends, many make no dividend forecast at all and some forecast no (or zero) dividends for the forthcoming year. This paper seeks to determine if no forecast at all should present a different signal to investors than a zero dividend forecast. It is found that those that do not forecast a dividend, by and large, do not pay a dividend. It is also found that those that forecast a zero dividend, true to their forecast, pay no dividend.

History

Journal

Applied financial economics letters

Volume

1

Pagination

139-141

Location

London, England

ISSN

1744-6554

eISSN

1744-6546

Language

eng

Publication classification

C1 Refereed article in a scholarly journal

Copyright notice

2005, Taylor & Francis

Issue

3

Publisher

Routledge

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