The Covid-19 Pandemic and Corporate Dividend Policy

56 Pages Posted: 8 May 2020 Last revised: 22 Sep 2021

See all articles by Georg Cejnek

Georg Cejnek

ZZ Vermögensverwaltung GmbH

Otto Randl

WU Vienna University of Economics and Business; affiliation not provided to SSRN

Josef Zechner

Vienna University of Economics and Business

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Date Written: April 2020

Abstract

This paper shows for major equity markets that the proportion of index values attributable to the first five years of dividends dropped substantially in the first quarter of 2020 and that this drop has not been reversed by the end of the year. In the cross-section, this breakdown of dividend smoothing due to COVID-19 was less severe for firms with higher operating cash flows and more positively co-skewed stock returns and more pronounced for those with higher leverage and in the financial sector. Heavy dividend cutters also experienced a substantial increase in exposure to systematic risk.

Suggested Citation

Cejnek, Georg and Randl, Otto and Zechner, Josef, The Covid-19 Pandemic and Corporate Dividend Policy (April 2020). CEPR Discussion Paper No. DP14571, Available at SSRN: https://ssrn.com/abstract=3594192

Georg Cejnek (Contact Author)

ZZ Vermögensverwaltung GmbH ( email )

Coburgbastei 4, Top5
Vienna, 1010
Austria
+43151818934 (Phone)

Otto Randl

WU Vienna University of Economics and Business ( email )

Welthandelsplatz 1
Vienna, 1020
Austria
+ 43 1 313 36 - 5076 (Phone)

affiliation not provided to SSRN

Josef Zechner

Vienna University of Economics and Business ( email )

Welthandelsplatz 1
Vienna, Wien A-1019
Austria

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