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Ex—dividend day stock price falls on the Spanish stock market

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  • Manuel Espitia
  • Francisco-Javier Ruiz

Abstract

In this paper the relative valuation of dividends and capital gains in the Spanish stock market is investigated by testing if the ex-dividend price fall equals the dividend amount. This study deals with the ex-dividend price behaviour considering as database the most representative shares in the Madrid Stock Exchange throughout the period 1980-92. On analysing the ex-dividend price fall ratio and the ex-dividend price ratio, the results lead us to conclude that in the Spanish capital market the ex—dividend price fall, in average terms, is significantly lower than the dividend amount, showing a clear preference for capital gains in relation to dividends.

Suggested Citation

  • Manuel Espitia & Francisco-Javier Ruiz, 1997. "Ex—dividend day stock price falls on the Spanish stock market," Applied Financial Economics, Taylor & Francis Journals, vol. 7(5), pages 481-492.
    • Handle: RePEc:taf:apfiec:v:7:y:1997:i:5:p:481-492
    DOI: 10.1080/096031097333349
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    References listed on IDEAS

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