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- Title
Reaction of Stock Prices to Dividend Announcements and Market Efficiency in Pakistan.
- Authors
Akbar, Muhammad; Baig, Humayun Habib
- Abstract
This study tests the semi-strong form of market efficiency by investigating the reaction of stock prices to dividend announcements. It analyzes cash, stock, and simultaneous cash and stock dividend announcements of 79 companies listed on the Karachi Stock Exchange from July 2004 to June 2007. Abnormal returns from the market model are evaluated for statistical significance using the t-test and Wilcoxon Signed Rank Test. The findings suggest negligible abnormal returns for cash dividend announcements. However, the average abnormal and cumulative average abnormal returns for stock and simultaneous cash and stock dividend announcements are mostly positive and statistically significant.
- Subjects
PAKISTAN; STOCK prices; DIVIDEND reinvestment; RETURNS on sales; BUSINESS models; ECONOMIC history
- Publication
Lahore Journal of Economics, 2010, Vol 15, Issue 1, p103
- ISSN
1811-5438
- Publication type
Article