Market Reaction to Dividend Announcement: An Empirical Study Using Event Study Technique
The event study methodology is considered to investigate the impact of an event on a specific dependent variable. A generally used dependent variable in event studies is the stock price of the company. The definition of such an event study will be a study of the changes in stock price beyond expectation i.e., abnormal returns during the event window period. While employing event studies to measure the event impact, the authors may found the techniques to outperform the market. The event study methodology seeks to determine whether there is an abnormal stock price effect associated with an event.