عنوان مقاله [English]
نویسندگان [English]چکیده [English]
This study presents evidence on the validity of the dividend signaling hypothesis, by using a new testing approach. The main question in this paper is whether dividend is informative about a firm’s future earnings. We examine this issue by investigating the association between current year stock returns and current and future earning for firms that pay dividends in the current years as compared to firms that do not pay dividends. The analysis of the data reveal that relative to non-dividend paying firms, dividend paying firms have current returns that are more associated with future earning . Overall, our results are consistent with dividends providing relevant information about future earning to the market that this information affect stock price.