Journal
| Title | The Impact of Dividend Omission Announcement on Market Price of Manufacturing Companies: A Study on Dhaka Stock Exchange (DSE) | |
| Author's Name | Mohammad Shahidul Islam, Humyra Maisur and Martuja Sultana | |
| ISSN | ISSN 0974-7281 | |
| Page(s) | 60-69 | |
| Volume No. | 7 | |
| Issue Month | January 2015 | |
| Keywords | Announcement date, Dividend, Event study, Market adjusted model. | |
| Abstract | The dividend policy is one of the most debated topics in the finance literature. According to the dividend signaling hypothesis, dividend change announcements trigger share returns because they convey information about firm’s future prospect. This paper focuses on the empirical analysis of the dividend signaling hypothesis and investigates the announcement effect of dividend changes. The study aims to examine the stock return behavior around the dividend announcement in Dhaka Stock Exchange. The event study methodology is used for this study. The abnormal return and cumulative abnormal return are calculated with market adjusted model. The event window is 30 days. The abnormal return and cumulative abnormal return are evaluated for significance using t-test. The findings of the study reveal that the reaction of stock prices to dividend omission announcement is statistically significant. The evidence tends to support the dividend signaling hypothesis that the bad news message affects the market negatively. |
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