Shareholder Wealth Effects of Dividend Policy Changes in an Emerging Stock Market: The Case of Cyprus
26 Pages Posted: 8 Jul 2015
Date Written: July 7, 2015
This article examines the stock market reaction to announcements of cash dividend increases and bonus issues (stock dividends) in the emerging stock market of Cyprus. Both events elicit significantly positive abnormal returns, in line with evidence from developed stock markets. This study contends that special characteristics of the Cyprus stock market delimit applicability of most traditional explanations for cash and stock dividends in favor of an information-signaling explanation. The empirical results are generally inconsistent with these contentions.
Keywords: cash dividends; emerging markets; stock dividends
JEL Classification: G34
Suggested Citation: Suggested Citation