Abstract
This study investigates whether risks and returns of dividend-paying stocks differ from non-dividend-paying stocks. It also examines the financial health and market risk exposure of dividend vs. non-dividend paying firms. The descriptive statistics show that average risks and return of non-dividend paying stocks are higher than dividend-paying stocks. However, tests of equality of means and variances fail to support the conventional view that dividend paying stocks’ returns and risks differ from non-dividend paying stocks over time. The Altman financial stress test shows that the average Z-score of non-dividend-paying stocks is higher and is more volatile than non-dividend paying firms. However, the results strongly reject the argument that dividend and non-dividend paying firms are equally exposed to financial risks. Furthermore, the tests of equality of mean and variance of market risk of dividend paying vs. non-dividend paying stocks are strongly rejected.
Sign-in/Register to access full text options 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
