Stock price reaction to cash dividend announcements in Vietnam

2017 ◽  
Vol 24 (2) ◽  
pp. 74-89
Author(s):  
NGUYEN THI VAN ANH ◽  
NGUYEN XUAN TRUONG ◽  
DAO MAI HUONG
Keyword(s):  
Stock Price ◽  
Cash Dividend ◽  
Price Reaction ◽  
Dividend Announcements ◽  
Stock Price Reaction

Stock market reaction to cash dividends: evidence from the Nigerian stock market

2019 ◽  
Vol 45 (3) ◽  
pp. 366-380
Author(s):  
Friday Kennedy Ozo ◽  
Thankom Gopinath Arun
Keyword(s):  
Stock Market ◽  
Event Study ◽  
Stock Price ◽  
Abnormal Returns ◽  
Cash Dividend ◽  
Content Type ◽  
Price Reaction ◽  
Stock Market Reaction ◽  
Dividend Announcements ◽  
Stock Price Reaction

PurposeVery little is known about the effect of dividend announcements on stock prices in Nigeria, despite the country’s unique institutional environment. The purpose of this paper is, therefore, to provide empirical evidence on this issue by investigating the stock price reaction to cash dividends by companies listed on the Nigerian Stock Exchange.Design/methodology/approachStandard event study methodology, using the market model, is employed to determine the abnormal returns surrounding the cash dividend announcement date. Abnormal returns are also calculated employing the market-adjusted return model as a robustness check and to test the sensitivity of the results toβestimation. The authors also examine the interaction between cash dividends and earnings by estimating a regression model where announcement abnormal returns are a function of both dividend changes and earnings changes relative to stock price.FindingsThe study find support for the signaling hypothesis: dividend increases are associated with positive stock price reaction, while dividend decreases are associated with negative stock price reaction. Companies that do not change their dividends experience insignificant positive abnormal returns. The results also suggest that both dividends and earnings are informative, but dividends contain information beyond that contained in earnings.Research limitations/implicationsThe sample for the study includes only cash dividend announcements occurring without other corporate events (such as interim dividends, stock splits, stock dividends, and mergers and acquisitions) during the event study period. The small firm-year observations may limit the validity of generalizations from these conclusions.Practical implicationsThe findings are useful to researchers, practitioners and investors interested in companies listed on the Nigerian stock market for their proper strategic decision making. In particular, the results can be used to encourage transparency and good governance practices in the Nigerian stock market.Originality/valueThis paper adds to the very limited research on the stock market reaction to cash dividend announcements in Nigeria; it is the first of its kind employing a unique cash dividends data.

scholarly journals Stock price reaction to cash dividend announcements in Vietnam

2017 ◽  
Vol 24 (02) ◽  
pp. 74-89
Author(s):  
Truong Nguyen Xuan ◽  
Huong Dao Mai ◽  
Anh Nguyen Thi Van
Keyword(s):  
Stock Prices ◽  
Stock Price ◽  
Stock Exchange ◽  
Abnormal Returns ◽  
Cash Dividend ◽  
Share Prices ◽  
Price Reaction ◽  
Cumulative Abnormal Returns ◽  
Stock Price Reaction ◽  
The Uk

This study attempts to investigate the stock price reaction to divi-dend announcements using data of Vietnamese listed firms on Hochiminh Stock Exchange (HOSE). Standard event study meth-odology has been employed on a sample of 198 cash dividend an-nouncements made in 2011. The results show that stock prices react significantly and positively to the announcements of cash dividends, including both dividend increasing and dividend decreasing events. It is also plausible that cumulative abnormal returns exhibit an in-creasing trend before announcement yet a decreasing trend after announcement dates. More specifically, we find positively signifi-cant cumulative abnormal returns of around 1.03% on announce-ment dates; other larger windows also demonstrate positive abnor-mal returns of around 1.3%. In addition, cash dividends have differ-ent effects on share prices of firms from different industries. These results support the signaling hypothesis and are also consistent with prior findings of empirical research done on more developed mar-kets, i.e. the US and the UK.

The Stock Price Reaction to Repricing Employee Stock Options

2001 ◽  
Author(s):  
John R.M. Hand ◽  
Barbara M. Grein ◽  
Kenneth J. Klassen
Keyword(s):  
Stock Price ◽  
Stock Options ◽  
Employee Stock Options ◽  
Price Reaction ◽  
Stock Price Reaction

Stock Price Reaction to Debt Offerings: The Turkish Evidence

2020 ◽  
Author(s):  
Evrim Akdogu ◽  
Sureyya Avci ◽  
Serif Aziz Simsir
Keyword(s):  
Stock Price ◽  
Price Reaction ◽  
Stock Price Reaction

scholarly journals Dividend Policy in Tunisia: A Signalling Approach

2018 ◽  
Vol 10 (4) ◽  
pp. 84 ◽  
Author(s):  
Taleb Lotfi
Keyword(s):  
Information Content ◽  
Event Study ◽  
Stock Price ◽  
Abnormal Return ◽  
Dividend Policy ◽  
Signaling Theory ◽  
Supporting Evidence ◽  
Dividend Announcements ◽  
Stock Price Reaction ◽  
Do So

The main objective of this study was to establish the stock price reaction to dividend announcements of firms quoted at the Tunisian Securities exchange (TSE). To do so, we develop a traditional event study. Two robust results emerge: First, when we observe the 196 announcements of dividends between years 1996-2004, the result is inconsistent with signaling theory, as long as, no abnormal return was observed on the announcement day (event period). Second, When the overall sample is divided into three sub-group (dividend increase, dividend-no-change and dividend), we observe a significant and abnormal return about -1.242 percent and -1.697 percent respectively on day D(t0-4) and D(t0+4) around the dividend announcement day (Dt0) only for the sub-group of firms that decreases their dividend. This result corroborates prior research in Tunisian context [Ben Naceur and al. (2006); Guizani and Kouki (2011)] that confirm, by using a different approach, the Lintner’s (1956) conclusions which states that Tunisian’ firms generally tend to avoid a dividend decrease (or cuts) and can constitute a supporting evidence of the dividend information content hypothesis in TSE.

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