Dividend payments to shareholders can create conflicts between debt and equity investors as these payments can expropriate wealth from bondholders to shareholders. However, dividend payments can also serve as a signal regarding firms' future earnings. Utilizing both improved bond event study techniques as well as a conditional event study model to control for self-selection and the presence of confounding earnings announcements, I find that, on net, dividend increases represent a transfer of wealth from debtholders to shareholders. Nevertheless, bondholders react more favorably to larger dividend changes consistent with the presence of a positive signaling effect. The conditional event study approach also provides the ability to test whether managerial hesitancy in cutting dividends may represent an additional source of expropriation. My results indicate that while bondholders are clearly harmed by these implicit dividend increases, evidence in support of shareholders' gains is mixed.