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The dividend signaling hypothesis [8] [9] posits that a company's announcement of an increase in dividend payouts constitutes an opportunity to signal to the market that the firm is "better off than the average". Increasing a company's dividend payout may then predict (or lead to) favorable performance of the company's stock in the future.
Signalling (or signaling; see spelling differences) in contract theory is the idea that one party (the agent) credibly conveys some information about itself to another party (the principal). Signalling was already discussed and mentioned in the seminal Theory of Games and Economic Behavior , which is considered to be the text that created the ...
From the signalling perspective, [4] cash dividends are "a useful device" to convey insider information about corporate performance to outsiders, and thereby reduce information asymmetry; see Dividend signaling hypothesis.
AbbVie stock trades at a forward price-to-earnings (P/E) ratio of 14.2, representing a significant discount to the S&P 500's 23.6 multiple. The drugmaker's valuation looks compelling given its ...
High-yield dividend stocks often catch investors' attention -- and for good reason. When established companies maintain larger-than-average dividend payments, they can provide both substantial ...
Walgreens started last year by cutting the quarterly dividend nearly in half. The company slashed the payout to 25 cents from 48 cents after spending about $1.7 billion on cash dividends in fiscal ...
The company says it has paid cash dividends every quarter since 1933, a streak stretching more than 90 years or nearly 370 straight quarters. Shares of Walgreens Boots Alliance Inc., based in Deerfield, Illinois, tumbled more than 15% to $9.66 after markets opened Friday.
The pecking order theory may explain the inverse relationship between profitability and debt ratios, [4] and, in that dividends are a use of capital, the theory also links to the firm's dividend policy. [5] In general, internally generated cash flow may exceed required capital expenditures, and at other times will fall short.