Gyan Management

Impact of Dividend Announcement on Share Price: Empirical Evidence from the National Stock Exchange

Harmanpreet Kaur¹ and Rajinder Kaur²

First Published 4 Sep 2025. https://doi.org/10.1177/09747621251370072

Article Information

Corresponding Author:

Harmanpreet Kaur, Punjabi University Patiala, Punjab 147002, India.
Email: harmanmmc@gmail.com

¹Punjabi University Patiala, Punjab, India

²Department of Commerce, Punjabi University Patiala, Punjab, India

Creative Commons Non Commercial CC BY-NC: This article is distributed under the terms of the Creative Commons Attribution-NonCommercial 4.0 License (http://www.creativecommons.org/licenses/by-nc/4.0/) which permits non-Commercial use, reproduction and distribution of the work without further permission provided the original work is attributed.

Abstract

The dividend policy is essential to all parties connected to the business. Although it is believed that dividend payments impact the market share prices, there is another belief that they deplete corporate reserves and may result in a liquidity crisis for business initiatives. This study aims to investigate the price response to dividend announcements made by 182 companies listed on the National Stock Exchange between 2010 and 2022. The average of the share prices prior to and following the dividend announcement was derived for this purpose. The effect of dividend announcements on share prices has been investigated using the paired t test. The findings indicate that in the majority of the industries, dividend announcements had no statistically significant effect on share prices. The investigation reveals important findings regarding investor expectations for dividends and market behavior.

Keywords

Dividend announcements, share price, National Stock Exchange (NSE)

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