Stock Price Behavior Around Ex-Dividend Day: Evidence from Dhaka Stock Exchange

Journal of Business Administration, Vol. 34, Nos. 1 & 2, January & April 2008

Posted: 23 Mar 2009

Abstract

In this paper the relative valuation of dividends and capital gains in the Dhaka Stock Exchange (DSE) is investigated by testing if the ex-dividend price fall equals the dividend amount. This study deals with the ex-dividend price behavior considering 83 dividend-paying stocks over the 32-window period to the ex-dividend day, which are listed on Dhaka Stock Exchange (DSE) for the period of January 2003 through December 2005. On analyzing the raw price ratio (RPR), market adjusted price ratio (MAPR), raw price drop ratio (RPD), and market adjusted price drop ratio (MAPD), the results lead us to conclude that in the DSE the ex-dividend price prices increase instead of dropped, showing a clear preference for capital gains without having any focus on dividends.

Keywords: Ex-dividend day, DSE

JEL Classification: G12, G14, G15, G35

Suggested Citation

Rahman, Muhammad Zahedur and Rahman, Md. Lutfur, Stock Price Behavior Around Ex-Dividend Day: Evidence from Dhaka Stock Exchange. Journal of Business Administration, Vol. 34, Nos. 1 & 2, January & April 2008, Available at SSRN: https://ssrn.com/abstract=1366283

Muhammad Zahedur Rahman (Contact Author)

Eastern University ( email )

H # 15/2, R # 3, Dhanmondi R/A,
Dhaka, 1205
Bangladesh
88-02-9676031 (Phone)
88-02-9675981 (Fax)

HOME PAGE: http://www.easternuni.edu.bd

Md. Lutfur Rahman

East West University ( email )

43-45 Mohakhali C/A
Dhaka, 1212
Bangladesh

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