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dc.contributor.advisorBhabra, Gurmeet
dc.contributor.authorMcKelvey, Sam
dc.date.available2011-07-18T23:47:38Z
dc.date.copyright2011
dc.identifier.citationMcKelvey, S. (2011). Specially Designated Dividends: Signalling or Free Cash Flow? (Thesis, Master of Business). University of Otago. Retrieved from http://hdl.handle.net/10523/1767en
dc.identifier.urihttp://hdl.handle.net/10523/1767
dc.description.abstractThis study jointly examines the signalling and free cash flow hypotheses as applied to announcement-period reactions around specially designated dividend (SDD) announcements. Results support the presence of both theories in the most recent era: 1990–2006. Specifically, significant positive relationships between returns and earnings changes for the year of SDD announcements and the year immediately following them are found. Separation based on proximity to regular dividend payments suggests the signalling strength is weak for SDDs paid in isolation, stronger when paid with a regular dividend and stronger again for those paid with a regular dividend increase. Signalling strength is also shown to be dominant within firms with a low Tobin’s Q, consistent in part with the conditional signalling hypothesis. Analysis also suggests that the market’s response is consistent with SDDs’ function as a tool for the mitigation of potential agency problems. Larger market reactions are found for firms with poor investment opportunities (low Tobin’s Q) coupled with large amounts of free cash flow.
dc.format.mimetypeapplication/pdf
dc.language.isoen
dc.publisherUniversity of Otago
dc.rightsAll items in OUR Archive are provided for private study and research purposes and are protected by copyright with all rights reserved unless otherwise indicated.
dc.subjectSpecially Designated Dividends
dc.subjectSignalling
dc.subjectFree Cash Flow
dc.subjectTobin's Q
dc.titleSpecially Designated Dividends: Signalling or Free Cash Flow?
dc.typeThesis
dc.date.updated2011-07-18T01:23:31Z
thesis.degree.disciplineAccountancy and Finance
thesis.degree.nameMaster of Business
thesis.degree.grantorUniversity of Otago
thesis.degree.levelMasters Theses
otago.openaccessOpen
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