The impact of dividend announcements on share price and trading volume

Felimban, Razaz; Floros, Christos; Nguyen, Ngoc Dung

doi:10.1108/jes-03-2017-0069

Cited by 12 publications

(14 citation statements)

References 75 publications

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“…On the other hand there are studies that support signaling theory. Felimban (2018) found partially supports for signaling hypothesis in Gulf countries stock market [17]. Chaabouni (2017) found that high dividend pay outs sign shareholders positively in Saudi Arabia Financial Markets [18].…”

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confidence: 80%

Stock Price Reactions on NASDAQ Stock Exchange for Special Dividend Announcements

Seyedimany

2019

Emerg Sci J

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Announcing dividend pay-out policy by a company will signals market firm's future prospects and changes its stock prices according to dividend signalling theory. By analysis the effect of special dividend announcements for 5 companies listed in NASDAQ for the period of 2014-2018, this study investigates the stock price reactions to special dividend announcement for 40 days around the event and challenges dividend signalling theory. The empirical results calculated both in discrete and logarithmic forms. Only few disordered significant abnormal returns and average abnormal returns occurred according to the t-test. The results show that shareholders do not gain value from announcement of special dividend in NASDAQ stock exchange market. That Results indicated from adjusted market model in this research do not support dividend-signalling theory Hence do not confirm that the announcement of dividend has significant effect on price of shares. In general the results consistent with the Miller and Modigliani (1961) dividend irrelevance hypothesis.

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confidence: 80%

Stock Price Reactions on NASDAQ Stock Exchange for Special Dividend Announcements

Seyedimany

2019

Emerg Sci J

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“…Abnormal Return (AR) is the difference between the actual return and the expected return. Brown and Warner (1985) in Felimban, Floros, and Nguyen (2018) calculated the AR with the estimated market-adjusted model as follows: : abnormal return on share i in day t : actual return on share i in day t : market return in day t Average Abnormal Return (AAR)…”

Section: Variables and Operational Definitions Abnormal Return (Ar)mentioning

confidence: 99%

“…The average daily abnormal returns for all company sectors in various countries were as the research object. Felimban et al (2018) used the formula for AAR as follows:…”

Section: Variables and Operational Definitions Abnormal Return (Ar)mentioning

confidence: 99%

“…: average abnormal return in day t, p (DI) for dividend-increasing firms, p (DD) for dividend-decreasing firms, and p (DC) for constant dividend firms. : total dividend announcement : day around the announcement : company which is issuing the dividend announcement Cumulative Average Abnormal Return (CAAR) Felimban et al (2018) described CAAR as the total sum of the company's average abnormal returns (AAR) during the observation period, which is ten days before and ten days after dividend announcement, for all sectors in each classification of dividend (increase, decrease, and constant). The formula used by Felimban et al (2018) is as follows:…”

Section: Variables and Operational Definitions Abnormal Return (Ar)mentioning

confidence: 99%

“…Information leakage might have occurred regarding the distribution of dividends to certain shareholders. However, because the AAR did not happen again on the day and after the announcement took place, it could be concluded that the average shareholder was neutral or familiar with the distribution of constant dividends, as revealed by Felimban et al (2018) with the research in member states of the Gulf Cooperation Council. The positive and negative AAR that occurred after the dividend decrease announcement showed that the average shareholder assumed a particular signal on the company's performance through the announcement, although not directly after the announcement, which happened on D+7, D+9, and D+10.…”

Section: Average Abnormal Return Around Dividend Announcementmentioning

confidence: 99%

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The Phenomenon of Dividend Announcement on Stock Abnormal Return (Case in ASEAN Countries)

Hariyanto

Murhadi

2021

MABIS

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Research aims: to examine the existence of stock’s abnormal return after dividend announcement activity.Design/methodology/approach: event study with 1.330 samples of dividend announcement in ASEAN countries during 2018. The research period was 21 days around the dividend announcement’s date.Research findings: this analysis's results agreed with the dividend signaling theory hypotheses, where the increase, decrease, or constant dividends could be an informative aspect for investors. Theoritical contribution/originality: it was shown by the presence of a positive abnormal return between an increase and a constant dividend, while a negative abnormal return between decrease dividends.Practitioner/policy implication: in the ASEAN capital market, it could be concluded that the change of dividend nominal would signal the firm’s prospect.Research limitation/implication: this research used the earliest dividend announcement before revision. Suggestions for further research are to pay attention to announcements of changes in dividend distribution dates and nominal revision, whether they contain information for investors, which will affect stock price movements.

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Dividend announcement effect analysis before and during the COVID-19 pandemic in the Indonesia Stock Exchange

Robiyanto

Yunitaria

2022

SN Bus Econ

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The emergence of the SARS-CoV-2 or COVID-19 pandemic has become a challenge for the global society, including the investors in the capital market, due to the uncertainty it has caused. In relation to the phenomenon, this research aimed to examine the impact of COVID-19 pandemic on the dividend announcement effect in Indonesia Stock Exchange by comparing the market volatility around the dividend announcement date of the selected stocks in 2019 and 2020. Implication of dividend increase and decrease as well as stock–risk profiling is also added for further learning. This research used event study methodology as a tool to analyze the data of the 23 sample companies taken from the LQ45 index. The period of analysis is ranged from 10 days before the dividend announcement to 10 days after the dividend announcement date. The study discovered that in 2019, the capital market presented a weak response toward the event, indicated by the inexistence of abnormal return. Moreover, in 2020, the dividend announcement effect caused negative insignificant abnormal returns and the number of companies with low volatility increased, which implies that the stock market is more pessimistic during the pandemic period. Even when the dividend amount increased from the previous period, the market still shows a negative reaction to it in 2020.

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The impact of dividend announcements on share price and trading volume

Cited by 12 publications

References 75 publications

Stock Price Reactions on NASDAQ Stock Exchange for Special Dividend Announcements

Stock Price Reactions on NASDAQ Stock Exchange for Special Dividend Announcements

The Phenomenon of Dividend Announcement on Stock Abnormal Return (Case in ASEAN Countries)

Dividend announcement effect analysis before and during the COVID-19 pandemic in the Indonesia Stock Exchange

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