Impacts of Cash Dividend Components on Earning Persistence and Return on Stock
Journal Title: Advances in Mathematical Finance and Applications - Year 2018, Vol 3, Issue 1
Abstract
The aim of this study is to evaluate the impact of cash dividend components on corporates earnings persistence and return on stock. The population of study con-sists of 109 companies listed in Tehran Stock Exchange from 2011 to 2016. Data was analyzed using regression model. According to results, the cash component of earnings is more persistent than accruals and it can be used to predict future earn-ings. Therefore, it is suggested that cash dividend component to predict future earn-ings. In addition, managers should pay attention to the cash component of earnings in their decisions made on the amount of optimal cash fund because this component can positively affect future earnings. Moreover, the cash flow component of earn-ings cannot be used to predict future return on stock. Therefore, investors are rec-ommended not to rely on the cash component of earnings in their investments, This is because even if corporates have considerable cash funds, their shares will not necessarily be a suitable option for investment and they should take other factors into account.
Authors and Affiliations
Ali Najfi Moghaddam, Dorna Aslani
Keywords
Related Articles
- EP ID EP426359
- DOI 10.22034/AMFA.2018.539134
- Views 73
- Downloads 0
Using Genetic Algorithm in Solving Stochastic Programming for Multi-Objective Portfolio Selection in Tehran Stock Exchange
Investor decision making has always been affected by two factors: risk and returns. Considering risk, the investor expects an acceptable return on the investment decision horizon. Accordingly, defining goals and constrai...
Impact of Managers’ Optimism on the Relationship between Patience of Major Shareholders and Information Influence Management
Behavioral financial knowledge deals with the behavior of investors and other users in the capital market. According to the financial knowledge, it is no longer expected that only factors such as accounting information a...
An Analysis of the Repeated Financial Earthquakes
Since the seismic behavior of the earth’s energy (which follows from the power law distribution) can be similarly seen in the energy realized by the stock markets, in this paper we consider a statistical study for compar...
Investigating the Effect of Management Entrenchment on Speed of Cash Holding Adjustment in Companies Listed in Tehran Stock Exchange
In this study, the effect of management entrenchments on the speed of cash holding adjustment in Iran has been investigated. After designing the management entrenchment evaluation indicators, the transaction information...
The Impacts of Financial Structure on Financial Performance of Banks listed in Tehran Stock Exchange: An Empirical Application
Financial structure is a combination of debt and equity and regards as one of the most important issues in banking industry. The purpose of financial structure decision is to create an appropriate combination of financin...