Influence of Dividends on the Earnings Informativeness : Empirical Evidence in the BM & FBOVESPA

In this study we verify if payment of dividends increases the earnings informativeness of firms listed on the São Paulo Stock Exchange (BOVESPA). The study is based on the paper of Francis, Schipper and Vincent (2005), and adds an interaction variable between earnings and dividends in order to answer the research problem, which in turn raises the possibility that the dividends increase the earnings informativeness. The study is explanatory, with a positive approach and produces empirical results from information available in the Economática® database. The period of the study covered the period from 2000 to 2009. We used multiple linear regression of panel data of a sample of 229 firms over 969 observations. Our findings indicate that earnings, when linked with the dividends, are more informative to explain/predict the stock price than if they are examined individually. Thus, the results suggest that dividends contribute positively to the informativeness of earnings as a predictor of stock returns