Search results

1 – 10 of 75
Article
Publication date: 1 October 2004

P. Olivier, A. van der Merwe and I. DuRand

Scrip dividend schemes provide shareholders with the option to choose shares instead of a cash dividend. Scrip dividends became popular in South Africa after the…

Abstract

Scrip dividend schemes provide shareholders with the option to choose shares instead of a cash dividend. Scrip dividends became popular in South Africa after the introduction of Secondary Tax on Companies (STC) in 1993. Thus far, no guidance on the recognition, measurement or disclosure of scrip dividends has been issued by the South African Institute of Chartered Accountants (SAICA). This article proposes disclosure regarding scrip dividend schemes that will provide relevant information to the users of financial statements. The proposed disclosure is based on the assumption that entities recognise and measure scrip dividends in accordance with the re‐investment method, as opposed to the capitalisation issue method.

Article
Publication date: 1 October 1978

James Millen

The extent of the ‘boom’ on the Stock Market — fuelled by confidence in the improvement in the rate of inflation figures and a strengthening pound — in the five weeks to…

Abstract

The extent of the ‘boom’ on the Stock Market — fuelled by confidence in the improvement in the rate of inflation figures and a strengthening pound — in the five weeks to August 11 came as a surprise to many. Despite the widespread gains in most sectors, the prospect of a sustained drive forward into new high‐ground from the FT 30‐Share Index was considered unlikely — and certainly the forward momentum was substantially checked by the announcement of the disappointing balance of payment figures for July.

Details

Industrial Management, vol. 78 no. 10
Type: Research Article
ISSN: 0007-6929

Open Access
Article
Publication date: 22 July 2021

Murat Isiker and Oktay Tas

The paper aims to measure the magnitude of the event-induced return anomaly around bonus issue announcement days in Turkey for recent years. Also, by describing the…

379

Abstract

Purpose

The paper aims to measure the magnitude of the event-induced return anomaly around bonus issue announcement days in Turkey for recent years. Also, by describing the information content of these announcements with the current data, the study tries to find out the factors that cause return anomaly in Borsa Istanbul when firm boards release the bonus issue decision.

Design/methodology/approach

The paper conducts event study methodology for detecting market anomaly around bonus issue announcements. For the pairwise comparison purpose, t-test and one-way ANOVA methods are applied to examine if abnormal returns vary according to the information content of the announcements.

Findings

Announcement returns for bonus issues from internal resources outperform the issues that are distributed from last year's net income as bonus shares. Findings indicate different return behaviour among internal resources sub-groups. Findings also suggest that investors in Turkey welcome larger-sized issues, while cumulated returns for the initial offers significantly differ from the latter issues.

Research limitations/implications

Findings are limited to the Turkish equity market. Also, the Public Disclosure Platform of Turkey, which is the main data source of the study, does not provide bonus issue announcements before 2010. Therefore, the previous year's data cannot be included in the analysis.

Originality/value

This paper is novel in terms of considering the main resources of the bonus issue in detail to measure the announcement's impact on stock returns.

Details

Journal of Capital Markets Studies, vol. 5 no. 1
Type: Research Article
ISSN: 2514-4774

Keywords

Article
Publication date: 1 October 2004

P. Olivier and I. DuRand

Scrip dividends have become increasingly popular in South Africa since the introduction of secondary tax on companies (STC) in the 1993 budget. To date there is no…

175

Abstract

Scrip dividends have become increasingly popular in South Africa since the introduction of secondary tax on companies (STC) in the 1993 budget. To date there is no accounting standard in South Africa that prescribes a particular accounting treatment for scrip dividends; therefore, different accounting approaches are used in South Africa to account for scrip dividends. These different approaches do not always meet the substance over form principle, as required by Generally Accepted Accounting Practice (GAAP). The result is that the information disclosed to the users of the financial statements differs from company to company. This study proposes an accounting treatment for scrip dividend schemes in South Africa. It concludes that the reinvestment approach is the most acceptable accounting treatment for scrip dividend schemes in South Africa.

Details

Meditari Accountancy Research, vol. 12 no. 2
Type: Research Article
ISSN: 1022-2529

Keywords

Article
Publication date: 12 July 2021

Murat Isiker and Oktay Tas

This paper aims to examine the stock return behaviour around the bonus issue announcements in eight emerging markets for 2010–2019 by addressing the signalling, cash…

Abstract

Purpose

This paper aims to examine the stock return behaviour around the bonus issue announcements in eight emerging markets for 2010–2019 by addressing the signalling, cash substitution and liquidity hypotheses.

Design/methodology/approach

Besides using the standard event study technique to test the presence of an anomaly, country-based regression analyses are performed. Firm-specific factors are used to understand the motive behind the anomaly observed pre- and post-announcement periods. Also, the Amihud illiquidity measure examines the liquidity hypothesis, while standardized profitability and investment ratios compare the long-run operational performance of bonus issuers to test the validity of signalling.

Findings

The findings provide evidence that abnormal returns can be detected ten days before the announcement in some countries, which is a sign of information leakage. The presence of the effect continues only in two countries after the announcement is released. The size of the bonus issue is found strongly significant in most countries, while a weak relation between abnormal return and other factors is detected. Moreover, the signalling hypothesis does not hold in the sense of long-run profitability increase, while liquidity assertion is partially presented.

Research limitations/implications

Due to an inadequate number of announcements in other emerging markets, the number of sample countries is limited by eight.

Originality/value

The research is novel regarding analyzing a wide range of emerging countries with various variables. Also, the paper is distinguished from other studies by applying multiple set of regressions under nine different event windows.

Details

Review of Behavioral Finance, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1940-5979

Keywords

Article
Publication date: 12 June 2007

Thomas McCluskey, Bruce Burton and David Power

This study aims to provide a modern perspective on the role of dividends in smaller developed countries such as Ireland by examining views regarding the determinants of…

1677

Abstract

Purpose

This study aims to provide a modern perspective on the role of dividends in smaller developed countries such as Ireland by examining views regarding the determinants of payout levels, the role of taxation and the relevance of conventional signalling theory.

Design/methodology/approach

The study employs semi‐structured interviews with the financial directors of 20 leading Irish companies.

Findings

The results suggest support for the notion that dividend policy affects share valuations. However, views regarding this issue – and the role of taxation and signalling theory – vary markedly between quoted and unquoted firms as well as depending on firms' dividend histories.

Research limitations/implications

The study suffers from the problem that in interview‐based research the participants are necessarily a self‐selecting group. Notwithstanding this point, the evidence suggests that the views of managers in a nation with a small, but highly developed, stock market are in line with those in countries with much larger exchanges. Further research could usefully extend the analysis and establish whether similar views exist in other countries with relatively small stock markets, but where the exchange is in an “emerging” rather than “developed” state.

Originality/value

The contribution of the paper comes from the uniqueness of the Irish setting: the Irish market is relatively small but, unlike many similarly sized markets, it is highly‐developed, with long‐term historical links to the London Stock Exchange. The results, therefore, provide evidence about the extent to which earlier findings based on the world's largest developed markets also prevail in those that are more modestly sized.

Details

Qualitative Research in Accounting & Management, vol. 4 no. 2
Type: Research Article
ISSN: 1176-6093

Keywords

Article
Publication date: 9 November 2015

Friday Kennedy Ozo, Thankom Gopinath Arun, Philip Kostov and Godfrey Chidozie Uzonwanne

The purpose of this paper is to provide an additional insight into the dividend puzzle by investigating the field practice of dividend policy in an emerging market such as…

1379

Abstract

Purpose

The purpose of this paper is to provide an additional insight into the dividend puzzle by investigating the field practice of dividend policy in an emerging market such as Nigeria. It also aims to contribute to the literature on industry-related dividend effect by examining whether managerial views on dividend policy vary between financial and non-financial firms.

Design/methodology/approach

The study employs semi-structured interviews with the financial managers of 21 Nigerian listed firms. The interviewees were divided into two broad groups of financial vs non-financial firms based on the industry classification of the firms.

Findings

The findings suggest that, despite differences in institutional environment, the dividend-setting process in Nigerian companies is similar in many extents to those in the USA and other developed markets. Nigerian companies exhibit dividend conservatism and typically focus on current earnings, stability of earnings and availability of cash when determining their current dividend levels. However, unlike in prior studies, the interviewees suggest that their companies do not have a target payout ratio; instead, they target the dividend per share when determining the disbursement level. Nevertheless, views regarding these issues vary significantly between financial and non-financial firms.

Originality/value

This paper adds to the extant literature that has examined the behavioural aspects of dividend policy using interviews, especially in the context of less-developed markets such as Nigeria. The study also updates and extends prior evidence on an industry-related effect on managerial perceptions of dividend policy.

Details

Managerial Finance, vol. 41 no. 11
Type: Research Article
ISSN: 0307-4358

Keywords

Article
Publication date: 1 November 1978

James Millen

As the leaves began to fall with the advent of October, so did the hopes and aspirations of many investors who, two short weeks before, had been encouraged into supposing…

Abstract

As the leaves began to fall with the advent of October, so did the hopes and aspirations of many investors who, two short weeks before, had been encouraged into supposing that with the FT 30‐Share Index at its 1978 peak of 535.5 the sky was the limit.

Details

Industrial Management, vol. 78 no. 11
Type: Research Article
ISSN: 0007-6929

Article
Publication date: 1 November 2002

Abimbola Adedeji and Richard Baker

Evidence reported by Geczy, Minton and Schrand (1997) showed that foreign exchange risk had a significant influence on the use of currency derivatives but that interest…

2921

Abstract

Evidence reported by Geczy, Minton and Schrand (1997) showed that foreign exchange risk had a significant influence on the use of currency derivatives but that interest cover and financial leverage did not. In this study, we suggest that the reason why foreign exchange risk was significant but interest cover and financial leverage were not significant in the evidence was because currency derivatives were used to measure the dependent variable. We verify the validity of this suggestion by testing the influence of interest cover and financial leverage on the use of interest rate derivatives. Our sample comprises 140 firms in the UK, 48 of which use interest rate derivatives. Evidence observed shows that interest cover and financial leverage have a significant influence on the use of interest rate derivatives and that foreign exchange risk does not. We also compare the previous evidence referred to above with our results to determine whether there is a difference between the factors that motivate firms to use currency derivatives or interest rate derivatives. The result of the comparison indicates that dependence on overseas product and capital markets, tax, institutional shareholding and economies of scale are the factors that motivate firms to use currency derivatives. The result also indicates that high interest cover (i.e. interest/profit before interest and tax)or total debt ratio, economies of scale and directors’ shareholding are the factors that motivate firms to use interest rate derivatives.

Details

Managerial Finance, vol. 28 no. 11
Type: Research Article
ISSN: 0307-4358

Keywords

Article
Publication date: 25 April 2022

Md. Borhan Uddin Bhuiyan and Fawad Ahmad

The purpose of this paper is to investigate the impact of financial restatement on corporate dividend payment. Firms that announce financial restatements rupture their…

Abstract

Purpose

The purpose of this paper is to investigate the impact of financial restatement on corporate dividend payment. Firms that announce financial restatements rupture their corporate reputation and adversely affect investors’ confidence. Consequently, firms must attempt to regain lost reputation and market confidence.

Design/methodology/approach

This study uses the US regulatory setting to examine the association between corporate dividend policy and financial restatement over the 2001–2017 financial years.

Findings

The findings evidence a robust positive association between financial restatement and dividend payouts, indicating that firms pay higher dividends following the year of financial restatement. Several sensitivity tests were conducted to confirm the robustness of the findings.

Originality/value

Prior research indicates that corporate dividend payouts enhance a firm’s reputation by reducing information asymmetry and providing a positive signal to investors regarding future financial performance. This study provides valuable evidence that dividend payout can be used as a channel for image restoration by firms with lost reputations because of financial restatement.

Details

International Journal of Accounting & Information Management, vol. 30 no. 3
Type: Research Article
ISSN: 1834-7649

Keywords

1 – 10 of 75