The Wealth Effects of Dividend Announcements on Bondholders-The Case Taiwan Bond Market.

• Main Authors: Wu, Chih-Hsun, 吳致勳
• Other Authors: Cheng, Ming-chang
• Format: Others
• Language: en_US
• Published: 2017
• Online Access: http://ndltd.ncl.edu.tw/handle/wxpzh9

碩士 === 國立中正大學 === 企業管理系研究所 === 105 === Bond is very common financial tools in the west capital market. It makes company operating on a better financial leverage without stock dilution. And also create tax shield to save cash flow and create value of business. But bond is less common in Taiwan. And we found the issuing and trading volumes of bond is decline in past years. According the previous study, we found there’s wealth transfer effect between bondholders and stockholders. And we suspected that’s why investors don’t put their money into bond market. Taiwan’s company don’t care about bondholder’s equity. So this study used event study methodology to observe the price change of bond and stock after cash dividend announcement. We found there significant abnormal return before the cash dividend announcement 60 day to 30 day. Though we can proved that result relate to directors and supervisors holdings or management holdings. We still suspected there’s insider trading affect the return. And we also observed the price change of bond between the period day -1 to day 1. Found the result is insignificant. We though there some reason lead to this result, include the trading of bond is low, the insider trading before announcement and the mixing of signaling effect and wealth transfer effect.