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Title: Large dividend increases and leverage
Authors: Cooper, Ian A. 
Lambertides, Neophytos 
Keywords: Capital structure;Dividend policy;Dividend changes;Leverage
Category: Economics and Business
Field: Social Sciences
Issue Date: 1-Feb-2018
Publisher: Elsevier B.V.
Source: Journal of Corporate Finance, 2018, Volume 48, Pages 17-33
Abstract: This study documents the fact that large dividend increases are followed by a significant increase in leverage, consistent with management increasing the dividend to use up excess debt capacity. However, the leverage increase is not captured by a standard partial adjustment model of leverage. Nor does it reflect variables known to be related to dividend increases, such as firm maturity, investment, and risk. Instead, the dividend increase signals a complex change in the way firms adjust to their leverage target, but it does not signal a change in the target.
ISSN: 09291199
Rights: © 2017 Elsevier B.V.
Type: Article
Appears in Collections:Άρθρα/Articles

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