Semi-Strong Form of Market Efficiency for Dividend and Bonus Announcements:An Empirical Study of India Stock Markets

Authors

  • Pooja Patel
     S.R. Luthra Institute of Management, MTB College Campus, Athwalines, Surat-395001, Gujarat
  • Jay Savani
     S.R. Luthra Institute of Management, MTB College Campus, Athwalines, Surat–395001, Gujarat
  • Nirav Poriya
     S.R. Luthra Institute of Management, MTB College Campus, Athwalines, Surat–395001, Gujarat

DOI:

https://doi.org/10.15410/aijm/2017/v6i1/120839

Keywords:

Efficient Market Hypothesis, Semi Strong From, Dividend, Bonus.

Abstract

Efficient Market Hypothesis (EMH) is predominantly a research area in the field of finance. EMH is studied worldwide to understand the share price behaviour and the same can be predicted by any means in future. Prediction of this share price behaviour helps a rational investor to earn abnormal returns from the markets. Symmetry of public information is associated with the semi-strong form of efficient market hypothesis which implies that the publicly available information is known to all the investors in the market and share prices fully reflect this information.The favourable news tends to bring a positive impact on the stock price behaviour and vice versa. Hence, the study of such corporate events can lead to predictability in the stock market which can help investors to earn abnormal returns. The present research paper has employed the event study and cross-sectional data analysis for validating the existence of semi-strong form of market efficiency in Indian stock markets pertaining to two major corporate events; 'dividend and bonus announcement'. The results of the study reveal that dividend and bonus announcements have significant impact on share prices only on 1 day pre announcement.

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Published

2017-01-01

How to Cite

Patel, P., Savani, J., & Poriya, N. (2017). Semi-Strong Form of Market Efficiency for Dividend and Bonus Announcements:An Empirical Study of India Stock Markets. ANVESHAK-International Journal of Management, 6(1), 108–121. https://doi.org/10.15410/aijm/2017/v6i1/120839

Issue

Volume 6, Issue 1, January 2017

Section

Articles
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Europe PMC

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