The stock market reaction to dividend cuts and omissions by large commercial banks


Investors consider commercial banks as unique types of financial institutions. Hence, they rely more in their transactions, on the banks’ dividend policy based information signaling than they do in the case of non-financial firms. The literature shows that non-banks dividend cuts produce abnormal returns between -1.5% and -3% during the two days event period. This study shows that the negative abnormal returns following the announcement of banks dividend cuts are larger than they are in the case of non-financial firms. We find that this cumulative average abnormal return varies around -6%.
Keywords: Abnormal Returns; Dividend Cuts; Commercial Banks.

46- A. GHAZI-Itemid=.pdf
46- A. GHAZI-Itemid=.pdf

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