International Journal of Applied Research
Vol. 2, Issue 5, Part F (2016)
How do stock prices react to change in dividends?
This paper explores the market reaction to change in dividend announcements of S&P CNX 500 stocks of National Stock Exchange for the period 2007-2012 using Event study Methodology. The results of the study show that the market reacted positively to dividend increase, decrease and constant announcements. The steady increase in CAAR for all the three changes in dividends shows investors preference towards dividend income. However, the magnitude of return is found to be high for decrease in dividends followed by constant dividends.
How to cite this article:
Dr. R Sharmila, Dr. Nanjundaraj Prem Anand. How do stock prices react to change in dividends?. Int J Appl Res 2016;2(5):384-388.