Stock Market Reactions to Dividend Announcement

Student: Ishmuratova Polina

Faculty: International College of Economics and Finance

Educational Programme: Double degree programme in Economics of the NRU HSE and the University of London (Bachelor)

Year of Graduation: 2017

In this paper analysis of stock market reaction to dividend announcement on Russian market from 2012 to 2016 was considered. The study was conducted on the sample of 25 companies according to event study technique. Stock price reaction to dividend announcement was tested on periods of crisis in 2014-2015 and on prevailing industries of the research. The results showed that investors reaction on high dividends not necessary led to increase in stock price. During the crisis time, the reaction to dividend announcement was mostly positive and higher than expected due to advance investors reaction to positive news, the results were supported by signaling theory, namely good news led to increase in dividend payments and vice versa.

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