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Market response to behaviour of cash dividend in the Colombo stock exchange: an empirical analysis

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dc.contributor.author Abdul Rauf
dc.date.accessioned 2015-06-18T11:37:50Z
dc.date.available 2015-06-18T11:37:50Z
dc.date.issued 2003-10
dc.identifier.citation Journal of Management. Volume I. No. 1. pp 22-33. October 2003.
dc.identifier.issn 1391-8230
dc.identifier.uri http://ir.lib.seu.ac.lk/123456789/22
dc.description.abstract This research paper aimed to examine the impact of cash dividend behaviour on stock prices, and investigate whether the Colombo Stock Exchange is semi strong form efficient. To achieve the objectives hypothesis were developed for testing. The sample included cash dividend announcements from 36 companies over a period of eight years from 1995 to 2002. The study has a sample size of only 50 announcements dates for this type of dividend announcement. To investigate the stock market response to cash dividend announcement the standard event study methodology is used. In this study an estimation of 100 days an event window of 21 days are used. The analysis showed that, the Colombo Stock Exchange is not efficient in the semi strong form sense. The study has found that the sudden changes in dividend behaviour have higher significant impact on stock price than the constant level of dividend behaviour. Since the results of this studv indicate that the CSE is informationally inefficient so it has important implications for the investors, management of companies and the stock market regulatory agencies. The investors could make use of the delayed reaction of cash dividend announcements information to make decisions with regard to changes (to buy or sell) they have to make their portfolio in order to make profits or avoid potential losses. The Securities and Exchange Commission of Sri Lanka could increase its monitoring activities on the stock market to ensure that listed companies disseminate important information such as cash dividend timely and regularly. This kind of research can motivate the development of share market activities through an effort of finding ways and means to earn better return by the investors of the Colombo Stock Market. en_US
dc.language.iso en en_US
dc.publisher Faculty of Management, South Eastern University of Sri Lanka en_US
dc.subject Cash dividend en_US
dc.subject Stock Prices en_US
dc.subject Dividend behaviours en_US
dc.subject Stock Management en_US
dc.title Market response to behaviour of cash dividend in the Colombo stock exchange: an empirical analysis en_US
dc.type Article en_US


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