EFFECT OF DIVIDEND ANNOUNCEMENT ON STOCK RETURNIN NEPALESE STOCK MARKE
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Abstract
The ambiguity and contradiction in results regarding the effect of dividend announcement on share prices come from different reasons which can include macro (Country-specific) and micro (Firm-specific) level changes in the literatures. When many research show that there is no significant evidence of semi-strong form of
efficiency but accept the dividend signaling theory in context of dividend announcement (Dangol, 2016 and Anh, Phuong & Manh, 2016) while many researches have proven the existence of semi-strong form of efficiency (Dangol, 2018, Hussin et al. 2010, Aharony & Swary, 1980, Asquith & Mullins, 1986, Dhillon & Johnson, 1994, Amihud & Murgia, 1997). This provides the space for further research and discussion on the topic in Nepalese context as the test results have varying results in varying countries and time.
Description
Dividend announcement is one of the most important information about the company to the shareholders. According to the semi-strong form of EMH, the information made public must be adjusted to the price of the company within the event date for the market to be efficient.