Two essays about mandatory dividend: what does the mandatory dividend have to inform to the market

• Autor(a) principal: Segantini, Giovanna Tonetto
• Data de Publicação: 2019
• Tipo de documento: Tese
• Idioma: por
• Título da fonte: Repositório Institucional da UFRN
• Texto Completo: https://repositorio.ufrn.br/jspui/handle/123456789/28465
• topic: CNPQ::CIENCIAS SOCIAIS APLICADAS::ADMINISTRACAO; Mandatory dividend; Signaling theory; Agency theory; Market reaction; Earnings quality

This research aims to investigate the influence of the mandatory dividend rule on the informational content of dividend announcements. Initially, it was observed how market react to unexpected quarterly and annual dividend change. Then, it was related the dividend status to earnings quality. The sample consist in firms listed on Brazil, Chile and Greece, countries that have minimum mandatory rule, from 2000 to 2017. The fundamental and financial data were collected at COMPUSTAT Global and Bloomberg, and analyst forecast are from I/B/E/S. The results show that analysts have optimistic forecasts for the dividends distribution and 81.3% of companies were worried about disclosing dividend equal to or greater than the minimum mandatory. Using the event study methodology, abnormal returns were observed following quarterly dividend announcements that follow quarterly earnings announcements, suggesting that dividends may provide a confirmatory information of preceding earnings announcement. Abnormal returns were observed when annual dividend announcements higher than the minimum mandatory. However, when analyzing the relation of accumulated abnormal returns to dividend announcements under the approaches of Signaling and Free Cash Flow theories, it was not possible to prove that the changes in dividend announcements were related to future changes in results, as the average returns in response to the announcement of the dividend payment were greater in the companies with excesses of investments. The results of the second part of the study suggest that the mandatory dividend rule may reduce the information of dividend announcement about earnings quality. By adding the mandatory dividend limits, only dividend announcements higher than the minimum mandatory increase the earnings persistence, and down earnings management were observed when related to unprofitable companies, which are not require to distribute dividends, and by companies with dividends above the minimum mandatory.