The Effect of Dividend Payments and Bad News Hoarding on Stock Price Crash Risk with an Emphasis on Information Asymmetry

The Effect of Dividend Payments and Bad News Hoarding on Stock Price Crash Risk with an Emphasis on Information Asymmetry

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This study examines the impact of dividend payments Toys and bad news hoarding on stock price crash risk with an emphasis on information asymmetry.In this regard, 123 companies were selected for the period of 2009-2014.Over investment is used to calculate bad news hoarding index.Also, Hong and Stein (2001) model is used to measure stock price crash risk.

Panel data method is used to hypotheses test.The findings show that the dividend payment has a negative and significant effect on stock price crash risk.Also, the negative impact of dividend payments is intensified on stock price crash risk when the information asymmetry between Mushroom Vapes managers and shareholders is high.The results show that bad news hoarding has a negative and significant effect on stock price crash risk and this impact is intense in companies with high information asymmetry.

Thus, bad news hoarding followed negative stock returns in the form of stock price crash risk.