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49257

Stock Price Reaction to Dividends Declaration in Emerging Stock Market

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Last updated: 04 Jan 2025

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Abstract

This study examines the common stock price behavior on ex-dividend day in Egyptian stock Market, and whether there is a significant statistical relationship between cash dividend as independent variable and stock price as dependent variable. The researchers executed the examination on the raw stocks' prices during the period from 2006 till 2010. It is noticeable that the Egyptian stocks market has special features where there are neither taxes on capital gains nor on cash dividends, and cash dividends in almost cases are distributed annually. The study is conducted on each year separately then on the accumulated data of all years to give diversity in results. A significant statistical relationship between cash dividend and price drop on ex-dividend day is found. The research found that the stock raw price drops on ex-dividend day by less than the amount of cash dividend and the average ratio of change in price to cash dividend during the whole period from 2006 till 2010 is 0.534. Which means that there is a market abnormal return that can lead to an arbitrage opportunity for investors.

DOI

10.21608/atasu.2016.49257

Keywords

اسعار الاسهم, توزيعات الارباح, اسواق الاسهم الناشئة

Authors

First Name

S. Dina

Last Name

Fadaly

MiddleName

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Affiliation

الاکاديمية العربية للعلوم والتکنولوجيا والنقل البحري

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Volume

20

Article Issue

8

Related Issue

7584

Issue Date

2016-12-01

Receive Date

2019-09-23

Publish Date

2016-12-01

Page Start

143

Page End

180

Print ISSN

2356-8402

Online ISSN

2682-3128

Article File

ATASU_Volume 20_Issue 8_Pages 143-180.pdf

PDF . 2.0MB

Link

https://atasu.journals.ekb.eg/article_49257.html

Detail API

https://atasu.journals.ekb.eg/service?article_code=49257

Order

11

Type

المقالة الأصلية

Type Code

907

Publication Type

Journal

Publication Title

الفکر المحاسبى

Publication Link

https://atasu.journals.ekb.eg/

MainTitle

Stock Price Reaction to Dividends Declaration in Emerging Stock Market

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Article

Created At

22 Jan 2023