The Impact of Regularly Dividend Announcements to Future Unexpected Earnings
Abstract
Nur Alam, A Destyanto (2005). The Impact of Regularly dividend
announcements to Future Unexpected Earnings, Yogyakarta. International
Program, Faculty of Economics, Islamic University of Indonesia.
The previous researches about dividend content information that are worth
for market are still in dispute. Several researches such as Natts (1973, 1976), Ang
(1975), Gonedes (1978), and Dedi Hendriansah, Januardi M. Diah, Arianto, and
Tashadi Tarmizi (2002) didn't invent evidence that dividend contains information.
A recent research conducted by Aharony and Swary (1980), Woolridge (1982),
Asquith and Mullins (1988), Venkantesh and Chiang (1986), Healy and Seifert
(1992), Mande(1994), Jeremy Schultz (2003), Scott Fung and Jayendu Patel
(2004) supported that announcement dividend contains of information.
This research is a replication from the research of Aharony and Dotan
(1994) and try to confirm the observation that reveals fluctuation stock price
influences announcement dividend in the form portfolio unexpected earning
company in the future. Population of this research is all companies that are listed
on the LQ'45 in Jakarta stock exchange period 1999-2004. The reason of using
period 1999-2004 is coincident with politics events general election that probably
influences financial position in Jakarta stock exchange. The research also
confirms the Scott Fung and Jayendu Patel (2004) theories where future
profitability tends to be influenced by firm's characteristic, long-term growth, and
firm valuation.
The result of this research shows announcement dividend changes do not
significantly influence fluctuation company profitability. However, this research
indicates that announcement dividend contains any information to market. The
Hypothesis "informational content of dividend" can be accepted. This research
proves new evidence about this hypothesis and it seems that fluctuation dividend
is more influenced by company profitability in the next period with conduction
dividend announcement. This indicates that fluctuated dividend gives a picture of
chances company profitability in the future. It seems the liquidness of LQ'45
relates to their regularly dividend announcements, the increasing (decreasing)
future unexpected earning is influenced by amount of their dividend regular
announcements.
Key Word: unexpected dividend change, future unexpected earnings, and
information content of dividend.
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