Stock Price Reaction to Dividend Increases in the Hotel and Restaurant Sector

Posted: 23 Sep 1999

See all articles by Stephen F. Borde

Stephen F. Borde

University of Central Florida - College of Business Administration

Anthony K. Byrd

University of Central Florida - College of Business Administration

Stanley M. Atkinson

University of Central Florida - College of Business Administration

Abstract

This study assesses the stock price reaction to announcements of dividend increases by firms in the hospitality industry using a standard event study methodoloy. Results indicate that dividend increases are favorably received by market participants because a statistically significant positive market reaction is observed. Results of a cross-sectional analysis show that the size of the market reaction across firms is positively related to the magnitude of the dividend increase. These results imply that managers ought to carefully consider the ramifications of a change in dividend policy because such changes appear to be perceived as signals of the firm's future financial condition.

JEL Classification: G00, G10, G14, G30, G35

Suggested Citation

Borde, Stephen F. and Byrd, Anthony K. and Atkinson, Stanley M., Stock Price Reaction to Dividend Increases in the Hotel and Restaurant Sector. Available at SSRN: https://ssrn.com/abstract=150601

Stephen F. Borde (Contact Author)

University of Central Florida - College of Business Administration ( email )

PO Box 161400
Orlando, FL 32816
United States
407-823-2977 (Phone)
407-823-6676 (Fax)

Anthony K. Byrd

University of Central Florida - College of Business Administration ( email )

PO Box 161400
Orlando, FL 32816
United States
407-823-5715 (Phone)

Stanley M. Atkinson

University of Central Florida - College of Business Administration ( email )

PO Box 161400
Dept. of Finance
Orlando, FL 32816
United States

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