Contribution of Dividend Policy Stability to the Measurement of Dividend Announcement and Ex-Dividend Effects on the French Market

Romon, Frédéric

doi:10.2139/ssrn.234149

Cited by 9 publications

(4 citation statements)

References 14 publications

Supporting

Mentioning

Contrasting

Order By: Relevance

“…However, our results are not consistent with some previous studies. Indeed, Romon (2000) doubted about the dividend clientele hypothesis when examining the stock price reactions at the ex-dividend date. This author claimed that the dividend clientele effect seems to be extremely limited because the market knows the firm dividend policy level before the ex-dividend dates.…”

Section: Resultsmentioning

confidence: 99%

See 1 more Smart Citation

Dividend Announcement and Ex-Dividend Effects on Stock Return

Ngoc¹,

Cuong²

2016

IJEF

View full text Add to dashboard Cite

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.

show abstract

Section: Resultsmentioning

confidence: 99%

“…However, Romon (2000) doubted the dividend clientele hypothesis. By examining the stock price reactions at the dividend announcement and that at the ex-dividend date, he found that around the dividend announcement date, the informational effect of dividend announcement depends on the firm dividend policy level.…”

Section: Literature Reviewmentioning

confidence: 99%

Dividend Announcement and Ex-Dividend Effects on Stock Return

Ngoc¹,

Cuong²

2016

IJEF

View full text Add to dashboard Cite

show abstract

“…Almost all international studies detect an ex-day price drop of less than one but, as in the US, evidence is mixed as to the existence of a tax clientele effect. Bell and Jenkinson (2000) and Michaely and Murgia (1995) find evidence supportive of that hypothesis in the UK and Italy; Romon (2000), Milonas and Travlos (2001) reject the existence of tax effects in France and Greece. For Canada, Bauer et al (2006) rule out both tax and tick-size effects on ex-day behavior, thereby agreeing with the previous findings of Lakonishok and Vermaelen (1983) and Booth and Johnston (1984), who find that the ex-day price drop was smaller than would be consistent with the tax regimes in effect.…”

Section: Evidence From Non-us Stock Marketsmentioning

confidence: 86%

The Ex-Dividend Day Stock Price Behavior: The Case of Portugal

Borges

2008

Atl Econ J

View full text Add to dashboard Cite

show abstract

“…However, it is highly probable that the ex-dividend date will not contaminate our finding as our event window extends only up to ten days postdividend declaration [2]. Moreover, unlike dividend announcements, exdividend is an expected event, and the previous study has documented its insignificant impact on stock price movement (Romon, 2000). Apart from the event window, an event study needs to specify an estimation window that indicates the period used to estimate the expected returns.…”

Section: Event Study Methodologymentioning

confidence: 99%

Dividend reduction and stock price reaction in Indian market: is there a role of share repurchase?

Chatterjee

Tiwari²

2022

JIBR

View full text Add to dashboard Cite

Purpose This paper aims to analyze the stock price reaction because of dividend reduction (DR) announcements in the Indian equity market, controlling for share repurchases. Design/methodology/approach The sample comprises National Stock Exchange (NSE) 500 companies listed in the NSE Ltd. covering a time span from year 2009 to 2019. Using the event study methodology, the authors measure the impact of DR announcements on security prices around the event day. The authors also examine the price response to DRs at the interim stage versus the final stage and identify the factors that drive the decision to reduce dividends at the interim level versus final level. Findings The authors find that overall DR announcements negatively impact abnormal returns. Firms that experience stronger adverse price reaction following DR announcements resort to share repurchase in the same year to boost stock prices. The authors find that interim DRs create more negative price reactions than final DRs. Finally, firms experiencing lower levels of prior year earnings, firms with smaller sizes and overvalued firms tend to reduce dividends at the interim level instead of postponing the reduction to the final level. Originality/value This paper examines stock price reaction because of DR announcements of Indian firms. The sample comprises firms that reduce dividends with contemporaneous share repurchases as well as firms that reduce dividends without contemporaneous repurchase activity. To the best of the authors’ knowledge, studies on substitution effect of dividends with buyback in the context of Indian equity market are rare. Further, investigating the difference in stock price movement because of DRs at the interim level versus the final level is the unique contribution of this paper.

show abstract

Contribution of Dividend Policy Stability to the Measurement of Dividend Announcement and Ex-Dividend Effects on the French Market

Cited by 9 publications

References 14 publications

Dividend Announcement and Ex-Dividend Effects on Stock Return

Dividend Announcement and Ex-Dividend Effects on Stock Return

The Ex-Dividend Day Stock Price Behavior: The Case of Portugal

Dividend reduction and stock price reaction in Indian market: is there a role of share repurchase?

Contact Info

Product

Resources

About