Signaling Safety

Previously circulated as “The Information Content of Dividends: Safer Profits, Not Higher Profits.” We thank Franklin Allen, Malcolm Baker, Bruce Carlin, Jonathan Cohn, Jason Donaldson, Ran Duchin, Miguel Ferreira, Slava Fos, Xavier Freixas, Nicola Gennaioli, Simon Gervais, Denis Gromb, Jie He, Praveen Kumar, Christian Leuz, Gustavo Manso, Jose-Luis Peydro, Amit Seru, Henri Servaes, Victoria Vanasco, Jules Van Binsbergen, Vikrant Vig, Vish Viswanathan, Yufeng Wu, Toni Whited, Ivo Welch, Amir Yaron and conference and seminar participants at the American Finance Association Annual Meeting, Adam Smith Corporate Finance Conference, Bocconi, Cambridge, the Corporate Finance Conference at Washington University, ESMT, ESSEC, Frankfurt, London Business School, London School of Economics, NBER Corporate Finance, Nova SBE, the Revelstoke Finance Conference, the Review of Corporate Finance Studies Conference, the 2017 TAU Finance Conference, Universitat Pompeu Fabra, Tsinghua SEM, University of Houston, University of Warwick, and the 2018 Western Finance Association Annual Meeting for valuable comments. Weber acknowledges financial support from the Fama Miller Center and the Cohen Keenoy Faculty Research Fund at the University of Chicago Booth School of Business. We thank Xiao Yin and Lisa Li for valuable research assistance. The views expressed herein are those of the authors and do not necessarily reflect the views of the National Bureau of Economic Research.

• January 17, 2018