Abstract
<p>Dividend paying on share is one of the most significant topics of behavioral finance and Capital Market literature. Previous research attempts to evidence on dividend declaration and investors’ perception based on developed economies. This research attempts to fill the gap between developed and developing economies on dividend deceleration of investors’ perception. The aim of this research is to investigate empirical facts on dividend clienteles in Bangladesh Capital Market as well as scrutinize the correlations among various dividend expectation and the diverse attributes of investors’ community in Bangladesh on dividend payment. Also, it aims to test theories those have previously been built concerning on dividends paying stock of investor perceptions. The study has been conducted on 250 active stratified random samples of Bangladeshi investors who provided data related to dividends preferences by conducting face to interview with structured questionnaires. This research support that there is negative association between stipulate for dividend paying stocks and investors demographic attributes in the Bangladesh Capital Market. We find that corporate managers do not consider investors expectation on dividend paying stock. The study also reveals that one of the most important determinants of dividend initiations among Bangladeshi firms are the value-weighted dividend yield in the industry. As well as investors’ perception depends on different attributes of investors’ and dividend preference.</p>
Highlights
A considerable empirical study has been conducted on market reaction to dividend declaration and content of information on dividends hypothesis
Investors are concerned whether the organization is performing well or has any other negative intention? This states that positive dividend announcements can carry positive signal to shareholders that may indicate regarding better prospects of the firm
Dividend announcements are one of the most important events and the studies on stock market reaction to earnings information are included in the semi-strong form of Efficient Market Hypothesis (EMH)
Summary
A considerable empirical study has been conducted on market reaction to dividend declaration and content of information on dividends hypothesis. If the dividend announcement is not reach up to the expectation level of the shareholders, the market reaction will in bear trend for that particular stock. To prevent this as a regulatory agency the Bangladesh Security and Exchange Commission (BBSEC) has initiated to provide compulsory quarterly earnings and yearly dividend announcements for the listed companies. This compulsory announcement creates a positive impact on the stock market. Dividend announcements are one of the most important events and the studies on stock market reaction to earnings information are included in the semi-strong form of Efficient Market Hypothesis (EMH)
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