Impact of Dividend Declarations on Stock Prices During COVID-19 in India: An Event Study Approach

Authors

  • Mallesha L.
  • Archana H. N.

DOI:

https://doi.org/10.33516/rb.v48i3-4.71-87p

Keywords:

Covid-19, Efficient Market Hypothesis, Event Study, Runs Test, Sub-Event Window

Abstract

This study aims to investigate the impact of dividend declarations on stock prices in the Indian stock market during the Covid-19 pandemic, where many companies faced unprecedented challenges due to the sudden onset of the pandemic. The study seeks to address the gap in research by exploring the relationship between dividends and stock prices during the pandemic. The research was conducted on S&P BSE 100 companies listed on the Bombay Stock Exchange. The event study methodology and runs test were used for the analysis. The estimated average abnormal returns and cumulative average abnormal returns were calculated 61 days in total, 30 days prior to and 30 days after the dividend declaration. Furthermore, the runs test was applied to determine if the abnormal returns were random. The study concluded that dividend declarations do not significantly affect stock returns during a stressful pandemic. The evidence suggests that in an efficient market, the stock prices quickly incorporate new information, indicating that generating abnormal profits in such a market is difficult.

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Published

2023-01-01

How to Cite

L., M., & H. N., A. (2023). Impact of Dividend Declarations on Stock Prices During COVID-19 in India: An Event Study Approach. Research Bulletin, 48(3-4), 71–87. https://doi.org/10.33516/rb.v48i3-4.71-87p

Issue

Volume 48, Issue 3-4, October 2022-January 2023

Section

Articles
Crossref
Scopus
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Europe PMC

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