Dividends in the Czech Capital Market and an Optimal Investment Strategy

Miloš Filip

Czech Journal of Economics and Finance (Finance a uver), 2000, vol. 50, issue 12, 685-698

Abstract: The average dividend yield on the Czech capital market from 1995 to 1999 was 4.8%. Stocks with high dividend yields (>5.5%) exhibited non-rational price pressures after their ex-dividend date. The average over-the-period return in the four days following the ex date was negative 4.7% ? stock prices continued to fall even though the stocks were bought without dividends. Short-term investors therefore suffered a capital loss that was greater than both the net and gross dividend paid. Simulated investment strategies suggest that it is reasonable for an investor to collect dividends on low-dividend-yield stocks

Keywords: dividends; ex-dividend day; efficient market; investment strategy (search for similar items in EconPapers)
JEL-codes: G1 G14 G35 (search for similar items in EconPapers)
Date: 2000
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Persistent link: https://EconPapers.repec.org/RePEc:fau:fauart:v:50:y:2000:i:12:p:685-698

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