Abstract

http://ssrn.com/abstract=1982249
 
 

References (36)



 
 

Footnotes (14)



 


 



The Informativeness of Dividends and Franking Credits


Jeffrey Coulton


Australian School of Business

Caitlin M. S. Ruddock


University of New South Wales (UNSW) - School of Accounting

Stephen L. Taylor


University of Technology Sydney (UTS) - School of Accounting; Financial Research Network (FIRN)

January 9, 2012

2012 Financial Markets & Corporate Governance Conference

Abstract:     
We investigate the informativeness of dividends and franking credits with respect to earnings persistence. We find strong evidence that dividend paying firms have more persistent earnings than non-dividend paying firms. Firms that pay franked dividends have significantly more persistent earnings than firms that pay unfranked dividends. Consistent with higher levels of franking identifying more mature firms, fully franked dividend paying firms have significantly less persistent losses than firms that pay partially franked dividends. Market pricing tests show that investors do rationally price earnings persistence once we control for profit compared with loss observations. Our results are robust to alternative model specifications and controlling for dividend size and firm age.

Number of Pages in PDF File: 41

Keywords: earnings persistence, dividends, franking credits

JEL Classification: G11, G35, M41

working papers series


Download This Paper

Date posted: January 10, 2012  

Suggested Citation

Coulton, Jeffrey and Ruddock, Caitlin M. S. and Taylor, Stephen L., The Informativeness of Dividends and Franking Credits (January 9, 2012). 2012 Financial Markets & Corporate Governance Conference. Available at SSRN: http://ssrn.com/abstract=1982249 or http://dx.doi.org/10.2139/ssrn.1982249

Contact Information

Jeffrey J. Coulton
Australian School of Business ( email )
Sydney, NSW 2052
Australia
+61293855811 (Phone)
+93855925 (Fax)

Caitlin M. S. Ruddock
University of New South Wales (UNSW) - School of Accounting ( email )
Sydney, NSW 2052
Australia
+612 9385 5806 (Phone)
+612 9385 5925 (Fax)
Stephen L. Taylor (Contact Author)
University of Technology Sydney (UTS) - School of Accounting ( email )
P.O. Box 123
Broadway NSW 2007
Australia
Financial Research Network (FIRN)
C/- University of Queensland Business School
St Lucia, 4071 Brisbane
Queensland
Australia
HOME PAGE: http://www.firn.org.au

Feedback to SSRN


Paper statistics
Abstract Views: 638
Downloads: 84
Download Rank: 176,764
References:  36
Footnotes:  14

© 2014 Social Science Electronic Publishing, Inc. All Rights Reserved.  FAQ   Terms of Use   Privacy Policy   Copyright   Contact Us
This page was processed by apollo8 in 0.250 seconds