Long-term stock performance following extraordinary and special cash dividends

De Wai Chou, Yi Liu*, Zaher Zantout

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

7 Citations (Scopus)


Using essentially all declared extraordinary and special cash dividends between 1926 and 2001 which are not preceded or followed by the same for a period of three years, we find no robust post-declaration long-term abnormal stock returns, even in sub-samples defined by the special dividend yield, the bang-for-the-buck, the declaration-period abnormal return, the sub-sampling period or the stock market condition at declaration. Only event firms in the smallest CRSP market capitalization quintile display significant positive abnormal returns during the first-year following the declaration. However, these latter are not robust across sub-sampling periods. Overall, there is no compelling evidence that investors under- or over-react to extraordinary or special cash dividends.

Original languageEnglish
Pages (from-to)54-73
Number of pages20
JournalQuarterly Review of Economics and Finance
Issue number1
Publication statusPublished - 2009 Feb
Externally publishedYes


  • Dividend policy
  • Market efficiency

ASJC Scopus subject areas

  • Finance
  • Economics and Econometrics


Dive into the research topics of 'Long-term stock performance following extraordinary and special cash dividends'. Together they form a unique fingerprint.

Cite this