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Dec 1, 2022 · The results of studies on the impact of stock liquidity on companies’ dividend policies are not conclusive. The liquidity cost hypothesis assumes a negative relationship between a firm’s stock liquidity and its dividend pay-out propensity. Firms which offer dividends can satisfy investors’ liquidity demands with limited trading.
- Stock liquidity and dividend payouts
Firms with high stock liquidity pay out 24.4% of their...
- Stock liquidity and dividend payouts
Nov 18, 2022 · Furthermore, as dividend payments help investors who need cash to avoid the trading costs associated with the homemade dividends, investors would be more attracted to dividend paying firms and firms with high dividends when market liquidity is low (Banerjee et al. 2007; Kuo et al. 2013). The increased demand for these firms during periods of low aggregate liquidity would reduce their stock ...
Feb 1, 2017 · Firms with high stock liquidity pay out 24.4% of their earnings on average, while firms with low stock liquidity pay out 18.4%. The t-statistic for the difference in means is 14.4, and the Wilcoxon z-statistic for the difference in medians is 22.8, indicating that these differences are both statistically significant at the 1% level.
- Fuxiu Jiang, Yunbiao Ma, Beibei Shi
- 2017
Sep 1, 2022 · Abstract. Using two exogenous shocks, we examine the causal impact of stock liquidity on firms' dividend policy. Both the first shock, the reduction of the minimum tick size from 1/16 to decimals in the US, and the second shock, the mandatory conversion of non-traded stocks to traded stocks in China, changed the liquidity of affected stocks.
ers, investors may y to safety by holding dividend paying stocks and selling non-dividend paying stocks. The decline in demand for non-dividend paying stocks during downturn periods would increase the vulnerability of the price of these stocks to the aggregate mar-ket liquidity, resulting in higher liquidity risk. As such, investors would ...
Jun 26, 2024 · The results reveal that stocks with high dividend yield have high trading liquidity and support Hypothesis 4, similar to findings documented for China-listed firms (Jiang et al. 2017) and Warsaw Stock Exchange-listed firms (Stereńczak and Kubiak 2022). The negative influence of family control (dummy) is consistent with Hypothesis 2, which shows that stocks of family firms have lower trading ...
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Jun 1, 2022 · We find that firms that pay dividends exhibit lower systematic liquidity risk than those that do not. We also report a significant negative relationship between dividend payment and systematic ...
