Influence of Dividend Policy of Companies Listed At Developing Stock Exchange on Their Share Prices: A Case Study of BRVM
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This study presents the characteristics of share price reaction to dividends announcement at West African Regional Stock Exchange (BRVM). To achieve this goal, data on dividends and stock prices over the period 2011-2016 have been collected. These were analyzed using the event study methodology, descriptive statistic and econometric techniques.
This analysis shows that the dividend announcement generates on average a decline in the share price over the event period, which is defined as a trading month before and after the announcement. Following dividends announcement, stock prices fallen is due to investors' disappointment on the dividends yield.
These results provide an answer to the problem the identification of the parameters that can be considered in dividend policy definition for companies listed at developing stock exchange, like BRVM. Managers should imperatively consider its influence on company’s value as perceived by investors after dividend announcement.
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