Testing the Information Content of Dividend Announcement by the Indian IT Companies
Published: 2010
Author(s) Name: Dr.M.RAJA
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Abstract
An efficient and integrated capital market is an important infrastructure that facilitates capital
formation. The efficiency with which the capital formation is carried out depends on the efficiency of
the capital markets and financial institutions. A capital market is said to be efficient with respect to an
information item if the prices of securities fully impound the return implications of that item. This
study has empirically examined the informational efficiency of capital market with regard to quarterly
earnings released by the banking sector companies in the semi-strong form of EMH. The study found
that the Indian capital market is not perfectly efficient in the semi- strong form of EMH, which can be
exploited by the investors to make abnormal returns.
Key words: Market Reaction/Stock Price Reaction, Abnormal Returns, Announcement Period,
Efficient Market, Buyback announcement.
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