The ex-date impact of special dividend announcements: A note

Abstract

This study examines the impact of special dividend announcements for a sample of Australian companies on the ex date of the special dividend. This study documents that the drop-off ratio is significantly greater for special dividends that participate in DRPs than non-DRPs. Further, it reveals that the drop-off ratio is greater for resources firms than for financial and industrial firms. Finally, a cross-sectional regression model reveals that the drop in price on the ex-date is significantly related to the announcement period price reaction, DRPs versus non-DRPs, size of the company, and special dividend per share.