Stock Prices Reaction to Dividend Announcements: A Study on Listed Companies in the Damascus Securities Exchange
Journal Title: International Journal of Academic Research in Accounting, Finance and Management Sciences - Year 2015, Vol 5, Issue 1
Abstract
According to the signaling theory, dividend announcements are usually considered as a signal to the investors, about firm’s future performance, that results in stock prices changes. This study attempts to investigate the stock prices response to dividend announcement in the Damascus Securities Exchange. The purpose of the study is to identify whether there are any significant abnormal returns around the public announcement of dividend. An event study methodology is used for an event window of forty days surrounding the announcement day. Research results indicate that most average abnormal returns are statistically insignificant, whereas the cumulative average abnormal returns are statistically significant for the whole event window. The downward drift of the cumulative average abnormal returns six days after the announcement suggests that prices don’t adjust immediately to dividend information. The stock reactions appear within post-event window gradually in response to the dividends announcement.
Authors and Affiliations
Ghada Abbas
Keywords
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- EP ID EP105822
- DOI 10.6007/IJARAFMS/v5-i1/1532
- Views 112
- Downloads 0
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