This 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.
|Number of pages||33|
|Journal||Journal of Business Finance & Accounting|
|Publication status||Published - Nov 2004|
- asset pricing
- payout ratio
- dividend yield