Dividend Decisions and Earnings
- 1 January 1990
- journal article
- review article
- Published by SAGE Publications in Journal of Accounting, Auditing & Finance
- Vol. 5 (1) , 3-25
- https://doi.org/10.1177/0148558x9000500102
Abstract
This paper examines whether managers use inflation accounting data in making dividend decisions. Two sources of inflation accounting data are used: individual firm data mandated by the FASB, and aggregate data estimated by the Department of Commerce. We find that aggregate dividend changes are related to aggregate inflation adjustments, but no such relation exists using individual firm data. Managers therefore, at least partially, consider the effects of inflation in making decisions to change their firms' dividends. However, their estimates of inflation are quite different from those reported to comply with FASB 33.Keywords
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