Investigation of Dividend Announcements Effect on Investor Behavior and Stock Valuations
Investigation of Dividend Announcements Effect on Investor Behavior and Stock Valuations
Authors:
Komal Gosavi, Vaishnavi Joshi, Sumita Gaikwad
S.Y.MBA, JSPM University Pune
Under the Guidance of Dr. Vineeta Agarwal
Abstract:
Investment decisions are influenced by various factors, with returns being one of the most critical considerations for investors. Shareholders often receive returns in the form of dividends, which can impact stock prices. However, the behaviour of stock prices remains unpredictable due to various factors. Economic and corporate actions influence price movements, but the impact of corporate actions like dividend payments varies across different stocks. This research examines the effects of dividend announcements on stock prices and abnormal returns, using a sample of 120 randomly selected stocks that paid dividends in 2016. The event study methodology analyzes the relationship between dividend announcements and stock price movements. The study aims to enhance understanding of the effects of dividend announcements on stock behavior and returns.
Keywords: stock prices, dividend announcements, market efficiency, abnormal returns, event study.