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THE IMPACT FOR STOCKHOLDERS WHEN REGULATED FIRMS REVISE DIVIDEND POLICY
Author(s) -
Shelor Roger M.,
Officer Dennis T.
Publication year - 1994
Publication title -
review of financial economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.347
H-Index - 41
eISSN - 1873-5924
pISSN - 1058-3300
DOI - 10.1002/j.1873-5924.1994.tb00576.x
Subject(s) - dividend policy , dividend , shareholder , business , monetary economics , stock (firearms) , stock market , financial economics , economics , finance , corporate governance , mechanical engineering , paleontology , horse , engineering , biology
This study examines the stock market's response when dividend policy changes are made by firms in a heavily regulated industry. Electric utilities are chosen because these firms are regulated in many ways. Regulatory control covers rates of return, pricing, markets and many other areas. This study focuses on dividend changes which follow a period of dividend stability. The results indicate that electric utility firms' stock prices adjust accordingly at the time of the announcement. The market reaction appears to be greater than that of previous studies which considered many industries.