Management Dividend Forecasts in the Nordics (An empirical study of post IPO management dividend forecast accuracy)

University essay from Handelshögskolan i Stockholm/Institutionen för finansiell ekonomi

Abstract: This paper aims to investigate management dividend forecasts in the Nordics. With a sample of 105 IPO observations, covering the time span 2000 to 2015, we examine whether there exist a forecast error between the stated dividend rate policy and the first annual dividend rate performed after the IPO. We apply a multivariate regression model in order to examine the management dividend forecast accuracy. Findings suggests there exist a forecast bias, i.e. that management over perform on their set forecast rate with 1.3%, although the result is not significant. However, we observe a significant absolute deviation between the management dividend forecast and the performed dividend rate, indicating that Nordic companies seem to file inaccurate management dividend forecasts in their IPO prospectus.

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