A Study on the Impact of Dividend on Stock Prices

Dr. Mohammed Arif Pasha ., M. Nagendra .


The investment decision is influenced by many factors of which one such factor is return. The shareholders may get return in the form dividend which affects the share prices.  The behavior of stock prices is unpredictable as price movement for different activities will move in different ways. The stock price influence activities can be divided into Economic and corporate activities. The impact of economic activities will be more or less same on all the stock prices while impact of corporate action varies from one stock to the other. Dividend payment is one of the important corporate actions that will have an impact on the behavior of stock prices. This research highlights the impact of dividend payment on the behavior of stock prices and their abnormal returns.  To understand this behavior, 120 stocks have been randomly picked which have paid the dividend in 2016.  The researchers have used popular event window study and abnormal returns.

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