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The response of stock prices to dividend news on the Ghana stock market: An empirical assessment
Journal of Economic & Financial Studies
View Archive Info| Field | Value | |
| Title |
The response of stock prices to dividend news on the Ghana stock market: An empirical assessment
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| Creator |
Boako, Gideon
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| Subject |
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Co-integration; Composite index; Dividend; Equity prices. G12; G14; G31. |
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| Description |
An important assumption of the signaling hypothesis is that dividend change announcements are positively correlated with share price reactions and future changes in earnings. However, Miller and Modigliani (1961)sustains that, dividend policy is irrelevant in arriving at a firm value, if the capital market is perfect. The purpose of this paper is to assess the potency of the dividend irrelevance theory on the Ghana stock market by using the Johansen-Juselius cointegration methodology on daily data of dividends, earnings and stock prices from January 2011 to December 2013. The results establish that equity prices in Ghana are not in sync with dividend announcements. However, the incorporation of earnings in the cointegration model provides varying result. The findings indicate that equity price change movements in Ghana are not responsive to dividend news.
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| Publisher |
LAR Center Press
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| Contributor |
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| Date |
2015-04-27
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| Type |
info:eu-repo/semantics/article
info:eu-repo/semantics/publishedVersion Peer-reviewed Article |
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| Format |
application/pdf
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| Identifier |
http://journalofeconomics.org/index.php/site/article/view/157
10.18533/jefs.v3i02.157 |
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| Source |
Journal of Economic & Financial Studies; Vol 3, No 02 (2015): April; 78-85
2379-9471 2379-9463 |
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| Language |
eng
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| Relation |
http://journalofeconomics.org/index.php/site/article/view/157/163
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| Rights |
Copyright (c) 2015 Gideon Boako
http://creativecommons.org/licenses/by-nc/4.0 |
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