The popularly traded companies are the most preferred choice of investors for investing in stocks. This is observed if we randomly check the trading frequency of these stocks at stock exchanges. The reactions on daily, monthly, quarterly and yearly basis are the expected outcomes in stock prices when announcements are floated on the trading floor. However, the magnitude of variation may vary with the type of news, company, industry, stock etc. The focus of the present study lies on the financial year 2008-09 for finding out significant change in the abnormal stock returns before and after dividend announcement by sample companies which are listed at NSE India. The study has used event study with constant mean return model to find out impact on daily data. The reactions on abnormal returns for dividend announcements are further empirically investigated with statistical tests.
Dividend, announcement effect, CAR, mean return, event study
