MARKET REACTION TO DIVIDEND INITIATION ANNOUNCEMENTS ON THE GHANA STOCK EXCHANGE: THE CASE OF INDUSTRIAL ANALYSIS
Journal Title: Asian Economic and Financial Review - Year 2014, Vol 4, Issue 4
Abstract
This study examines the market?s reaction to dividend initiation announcements. In particular, it considered the magnitude of abnormal returns during the days that surround announcements of dividend initiation. This study expects to reveal whether dividend initiation is important to investors on the Ghana Stock Exchange. It also expects to reveal whether the type of firm?s industry has influence on the investors? investment decision. This is accomplished by measuring the abnormal returns before, during and after dividend initiation announcements. Using an event study approach, the evidence shows that dividend initiation announcements are greeted positively by investors. Industry based analysis is made to ascertain if firms in different industries react differently to dividend initiation announcement. The industries included: manufacturing, financial service and the other industries. The results suggest that firms in the manufacturing industry experience stronger investors? reaction than firms in the other industries.
Authors and Affiliations
Yakubu Awudu Sare| Department of Banking and Finance, School of Business and Law, University for Development Studies, Wa-Ghana, Seyram Pearl-Kumah| Department of Banking and Finance, Ghana Baptist University College, PMB, Kumasi- Ghana, Andrews Salakpi| Department of Accountancy, School of Business and Law, University for Development Studies, Wa-Ghana
Keywords
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