The informative value given by the announcement of distribution of dividend has already been investigated. One of the leading studies on this matter is Lintner (1956). Lintner found a relation between mutation in dividend, profits in the current financial year and the dividend in the last financial year. This dividend-model is known as the Lintner-model. When the mutation in the dividend differs from what was to be expected by this dividend-model, Lintner finds this to have informative value regarding the amount of profit in the future. In 197 1 I/B/E/S International started a financial data-file, The Institutional Brokers Estimate System (I/B/E/S). This data-file contains the expectations of the analysts regarding profit. Since 1989 I/B/E/S is collecting this data also for Dutch firms. In this article an extra variable is added to the Lintner-model, namely the expectations collected by I/B/E/S mentioned above. The purpose of this article is to find out if there is still informative value regarding the amount of profit in the future when the mutation in the dividend differs from what was to be expected by this adjusted Lintner-model.
The text is part of a series Serie Research memoranda / Vrije Universiteit Amsterdam. Faculteit der Economische Wetenschappen en Econometrie Number 0020
Classification:
G14 - Information and Market Efficiency; Event Studies
