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Price Reactions to Dividend Announcements on the Nigerian Stock Market

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  • Olatundun Janet Adelegan

Abstract

The study uses a modified market model to investigate whether the Nigerian stock market reacts efficiently to dividend announcements in terms of price adjustments. The study finds that the cumulative excess returns (CERs) for dividend paying firms are positive and significant for 30 days from the day of the announcement, while the CERs for dividend omitting firms for the same period are significant and negative. The CERs for the subsamples are statistically significant around the event window. Overall, this provides evidence that the Nigerian stock market is not semia-strong efficient, that dividend policy matters and that share prices do react to dividend announcements.

Suggested Citation

  • Olatundun Janet Adelegan, 2009. "Price Reactions to Dividend Announcements on the Nigerian Stock Market," Working Papers 7656e2ac-5190-4618-963d-9, African Economic Research Consortium.
    • Handle: RePEc:aer:wpaper:7656e2ac-5190-4618-963d-98e21e8d98c9
    Note: African Economic Research Consortium
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