The Effect Of Cash Dividend Payment Announcement on Firm's Stock Price: Evidence From Indonesia During The Covid-19 Pandemic

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Thedy, Muhammad Raihan (2021) The Effect Of Cash Dividend Payment Announcement on Firm's Stock Price: Evidence From Indonesia During The Covid-19 Pandemic. Undergraduate thesis, IPMI Business School.

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THE EFFECT OF CASH DIVIDEND PAYMENT ANNOUNCEMENT ON FIRM’S STOCK PRICE EVIDENCE FROM INDONESIA DURING THE COVID-19PANDEMIC - Muhammad Raihan Thedy.pdf
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Abstract

Dividend announcement have always played a role in the movement on stock prices. The opinions and views of other researchers regarding the effect of dividends announcements on the stock prices vary from each other. When a Company decides to announce its dividend payout policy, it signals the market that the firm is now processing future perfects, which will result in changing its stock prices. However, since the Covid-19 global pandemic put the global economy in a crucial state, companies should priorities retaining its earnings and increasing its cash reserve in order to prepare for the worst case scenario the pandemic brings. This study analyzes the impact of dividend announcements of 148 public listed companies in the indonesian stock exchange during the year 2020, and examines how the market reacts to these announcements by using the event study methodology and financial variables such as ROE, CR, EBITDA/Interest Expanse, Dividend Yield and DPR, to figure out which of them is significant in creating a positive or negative cumulative abnormal return (CAR). The study employs event study methodology in examining the effect of cash dividend announcement on the stock price surrounding 20 days of announcement. The findings of this research reveals that in the year 2020, none of the independent variables were significant to the cumulative abnormal return, although the results show whether it is negatively or positively correlated to the cumulative abnormal return.

Item Type: Thesis (Undergraduate)
Subjects: H Social Sciences > H Social Sciences (General)
Divisions: Thesis > Bachelor of Business Administration
Depositing User: Dede Faujiah
Date Deposited: 05 Jan 2022 03:08
Last Modified: 05 Jan 2022 03:08
URI: http://repository.ipmi.ac.id/id/eprint/1352

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