Open AccessDividend Announcement Effect To Market Reaction in Non-Financial Companies Listed on Indonesia Stock Exchange
Author(s) -
Alvin Fabian,
Eko Budi Santoso
Publication year - 2019
Publication title -
journal of accounting, entrepreneurship and financial technology
Language(s) - English
Resource type - Journals
eISSN - 2686-4479
pISSN - 2686-5505
DOI - 10.37715/jaef.v1i2.1467
Subject(s) - dividend , dividend policy , stock exchange , abnormal return , event study , dividend yield , business , nonprobability sampling , sample (material) , dividend payout ratio , stock market , financial economics , monetary economics , accounting , financial system , economics , finance , paleontology , population , context (archaeology) , chemistry , demography , chromatography , horse , sociology , biology
Abstract: This study aims to examine the differences in market reaction before and after the announcement of dividend omissions and dividend initiations in non- financial companies listed on the Indonesia Stock Exchange in 2016-2018. The sample used in this study was 71 companies consisting of 26 companies that announced dividend omissions and 45 companies that announced dividend initiations. The sample was determined using the purposive sampling method. This study used the event study method with an event window period of 5 days before the announcement, the announcement day, and 5 days after the announcement. The Wilcoxon Signed Ranks Test results in this study indicate that there are no differences in market reaction before and after the announcement of dividend omissions. Meanwhile the announcement of dividend initiations shows that there are differences in market reaction before and after the announcement of dividend initiations.
Keywords: Event study, Dividend Omissions, Dividend Initiations, Abnormal Return