M.COM., M.B.A., M.PHIL, (P.HD) Research Scholar and
This paper attempts to explore the possible links between dividend policy and stock price behaviour in Indian IT sector. A sample of five listed companies from NSE were examined. Dividend policy has always been a source of controversy despite years of theoretical and empirical research both in developed countries and emerging economies.
The impact of dividend announcement over return before and after date has been examined by using various tests like, t-Test and Correlation, and it was found that the dividend effects are reflected into the market price of the company within the time period of few days before the announce date to few days after the ex-dividend date. Thereafter the markets start behaving efficiently and absorb all the available information in the market So that investor should behave rationally while taking their decision regarding investment in any script.
Dividend policy, dividend decision, trading volume and insider information
