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
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: Suggested Citation