The following plot depicts cumulative abnormal returns over 36 months following an announcement for firms that initiated a new dividend and for firms that omitted a planned dividend (initiations and omissions occurred in month 0). BRIEFLY discuss whether this evidence supports the efficient market hypothesis.

Dividend initiations Dividend omissions 03 0.2 Mean Buy-and-Hold Abnormal Return 01- -01 -0.2 -12 36 6 0 6 12 18 24 30 Months Rel. to Calendar Month End Date of Initiation/Omission Dividend initiations Dividend omissions 03 0.2 Mean Buy-and-Hold Abnormal Return 01- -01 -0.2 -12 36 6 0 6 12 18 24 30 Months Rel. to Calendar Month End Date of Initiation/Omission