Dividend Announcement and Ex-Dividend Effects on Stock Return

Dinh Ngoc and Nguyen Chi Cuong

International Journal of Economics and Finance, 2016, vol. 8, issue 7, 207

Abstract: We study the impact of dividend policy on the stock return by investigating reaction of the stock price on the dividend announcement date and the ex-dividend date. In order to achieve this goal, a sample comprising 1962 observations of dividend-related events from 432 listed companies in Vietnam during the period 2008 to 2015 is chosen to analyze and the event study methodology is used to estimate abnormal returns to the shares around the announcement date and the ex-dividend date. Our results clearly show that the effect of dividend announcement on the stock return is positive around the announcement date. In addition, the stock price moves up as long as the ex-dividend date approaches and then starts decreasing from this date onwards.

Date: 2016
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