Abstract:
This paper explores the Share price reaction to dividend announcement and earning per
share by the Milanka companies on Colombo Stock Exchange. The main objective of this
research is to study whether Sri Lanka investors to consider the company dividend
announcement or earning per share while making investment and also to find out the
relationship between share prices and company dividend announcement and earning per
share several theories have developed in different ways. Hence researcher has to find out
the practical behavior of Sri Lanka investor regarding dividend announcement and
earning per share impact on share price. Also, determine to what extent researcher can
use dividend announcement to value the stock of the respective companies. In performing
this study the number of companies has selected as sample Milanka companies from
listed companies. Those companies perform well and declare the dividend s annually or
non dividend declaration between research periods. Share price of Milanka companies
depends on lot of variables such as dividend, earning, financial position, human resource
of the company, strength and weakness of the company, external situation.
