An academic study of dividend ommissions found that:

a. on the day before, and the day of, the dividend ommission announcement, cumulative abnormals returns move downward.

b. cumulative abnormal returns usually are flat on the announcement date because a dividend ommission implies more cash is retained in the firm (so stock price does not drop).

c. stock returns are significantly positive when a dividend omission announcement occurs.

d. stock price reacts slowly to a dividend ommission. Prices tend to trend downward over the subsequent 10 trading days.

e. a dividend ommission generally has no effect on cumulative abnormal returns.