Earnings and Dividend Announcements is There a Corroboration Effect?

35 Pages Posted: 12 Apr 2004 Last revised: 13 Oct 2008

See all articles by Alex Kane

Alex Kane

University of California, San Diego (UCSD) - Graduate School of International Relations and Pacific Studies (IRPS)

Youngki Lee

Boston University - Center for Polymer Studies

Alan J. Marcus

Boston College - Department of Finance

Date Written: December 1983

Abstract

We examine abnormal stock returns surrounding contemporaneous earnings and dividend announcements in order to determine whether investors evaluate the two announcements in relation to each other.We find that there is a statistically significant interaction effect.The abnormal return corresponding to any earnings or dividend announcement depends upon the value of the other announcement. This evidence suggests the existence of a corroborative relationship between the two announcements. Investors give more credence to unanticipated dividend increases or decreases when earnings are also above or below expectations, and vice versa.

Suggested Citation

Kane, Alex and Lee, Youngki and Marcus, Alan J., Earnings and Dividend Announcements is There a Corroboration Effect? (December 1983). NBER Working Paper No. w1248. Available at SSRN: https://ssrn.com/abstract=321303

Alex Kane (Contact Author)

University of California, San Diego (UCSD) - Graduate School of International Relations and Pacific Studies (IRPS) ( email )

9500 Gilman Drive
La Jolla, CA 92093-0519
United States

Youngki Lee

Boston University - Center for Polymer Studies

590 Commonwealth Ave
Boston, MA 02215
United States
617-491-6946 (Phone)

Alan J. Marcus

Boston College - Department of Finance ( email )

Fulton Hall
Chestnut Hill, MA 02467
United States
617-552-2767 (Phone)
617-552-0431 (Fax)

Register to save articles to
your library

Register

Paper statistics

Downloads
79
Abstract Views
1,235
rank
312,691
PlumX Metrics