1. What do dividends demonstrate? Durham University Daisi Wang Class 8

2. Introduction What is my essay question? 1 What is my main argument? 2 What is the purpose of different section? 3 4 What have I found the difficulties? 5 what to do next?

3. Essay Question To what extend do dividends (and dividend changes) convey useful information for investors?

4. Main Argument Dividends and dividend changes demonstrate current company performance and future profitability.

5. First Section Increase earnings per share Repurchase shares Pay dividends Why do companies pay dividends?

6. First Section Attraction Tax-differences Institutions Individual investors and institutions Firm management Monitoring Tax advantage

7. Second Section 1 Positive change to current permanent earnings 2 Dividends indicate current company performance Cost minimization

8. Third Section 1 2 Positively related to earning changes Future abnormal earnings Dividend changes relate to future profitability

9. Difficulties and Next to Do Opposite opinions Lots of models English professional definitions Independent Thinking

10. References Allen, F., Bernardo, A.E. , and Welch, I. (2000) ‘A theory of dividends based on tax clienteles’, Journal of Finance, 55(6), pp. 2499-2536 EBSCO[Online]. Available at: http://www.ebscohost.com/ Benaritzi, S. Michealy, R. and Thaler, R. (2004) ‘Do changes in dividends signal the future or the past?’, Journal of Finance, 52(3), pp. 1007-1034 EBSCO[Online]. Available at: http://www.ebscohost.com/ Garrett, I. and Priestley, R. (2000) ‘Dividend behavior and dividend signaling’ The Journal of Financial and Quantitative Analysis, 35(2), pp. 173-189 EBSCO[Online]. Available at: http://www.ebscohost.com/ Nissim, D. and Ziv. A. (2001) ‘Dividend changes and future profitability’ Journal of Finance, 56(6), pp. 2111-2133 EBSCO[Online]. Available at: http://www.ebscohost.com/

11. Thank You ! Daisi Wang Class 8