Study of dividend policies in periods pre and post-merger

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This study examines the policies of pre- and post- merger dividends. The emphasis here is on the timing of payment of dividends and its signal role when the merger is considered successful. Our analysis is purely descriptive and involves the merger of CVS and Caremark listed on the NY Stock Exchange and conducted in 2006. The findings indicate the relevance of dividend payment timing as the merger of success signal since acquiring company tries to improve its payment timing and the amount to be paid. This proves the existence of complementarities between the signaling hypothesis by the amount of dividend to be paid and payment timing and confirms the existence of a dynamic adjustment process to a target level.