Premium
The Ex–Dividend Pricing of REITs
Author(s) -
Hardin III William G.,
Liano Kartono,
Huang Gow–cheng
Publication year - 2002
Publication title -
real estate economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.064
H-Index - 61
eISSN - 1540-6229
pISSN - 1080-8620
DOI - 10.1111/1540-6229.t01-1-00049
Subject(s) - real estate investment trust , dividend , dividend yield , economics , financial economics , stock (firearms) , dividend policy , monetary economics , business , real estate , finance , mechanical engineering , engineering
Past studies have shown that ex–dividend stock prices are not fully reflective of dividend payments. A tax–induced clientele effect and micromarket limitations in stock pricing have been used to explain this pricing anomaly. This study focuses on the ex–dividend behavior of real estate investment trusts (REITs). Due to a low correlation between dividend size and dividend yield, REITs permit a cleaner examination of a tax–induced clientele effect. The results indicate that tick constraints in pricing ex–dividend stocks create the appearance of a tax–induced clientele effect in REITs when none should exist.