The role of payout ratio in the relationship between stock returns and dividend yield
The role of payout ratio in the relationship between stock returns and dividend yield
The paper examines the relationship between returns and dividend yield in the UK stock market, and introduces earnings-related data to the asset pricing model in the form of payout ratio. The latter has a considerable effect upon the inferences which would otherwise be drawn from a study of the dividend yield-returns relationship in the absence of such earnings information. Payout ratio conveys additional signalling information and is an important adjunct to dividend yield in explaining returns.
returns, asset pricing, payout ratio, dividend yield, earnings
1355-1387
McManus, Ian
7c589589-dc7f-4f5c-8c34-e8a28c55df18
Ap Gwilym, Owain
dbd356d9-b22d-420b-a980-7341f6d52f34
Thomas, Stephen
3ebf2346-25f1-4f19-b854-7a7da0cee9ca
10 November 2004
McManus, Ian
7c589589-dc7f-4f5c-8c34-e8a28c55df18
Ap Gwilym, Owain
dbd356d9-b22d-420b-a980-7341f6d52f34
Thomas, Stephen
3ebf2346-25f1-4f19-b854-7a7da0cee9ca
McManus, Ian, Ap Gwilym, Owain and Thomas, Stephen
(2004)
The role of payout ratio in the relationship between stock returns and dividend yield.
Journal of Business Finance & Accounting, 31 (9-10), .
(doi:10.1111/j.0306-686X.2004.00577.x).
Abstract
The paper examines the relationship between returns and dividend yield in the UK stock market, and introduces earnings-related data to the asset pricing model in the form of payout ratio. The latter has a considerable effect upon the inferences which would otherwise be drawn from a study of the dividend yield-returns relationship in the absence of such earnings information. Payout ratio conveys additional signalling information and is an important adjunct to dividend yield in explaining returns.
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Published date: 10 November 2004
Keywords:
returns, asset pricing, payout ratio, dividend yield, earnings
Identifiers
Local EPrints ID: 35961
URI: http://eprints.soton.ac.uk/id/eprint/35961
ISSN: 0306-686X
PURE UUID: fe857929-3efb-4ccf-a08e-3ed974ea0a54
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Date deposited: 23 May 2006
Last modified: 15 Mar 2024 07:55
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Author:
Ian McManus
Author:
Owain Ap Gwilym
Author:
Stephen Thomas
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