An Empirical Research on the Impact of Dividend Policy Disclosure on Company Stock Price

Abstract

This thesis uses the event study method and takes the A and B shares of the manufacturing industry in Shanghai and Shenzhen stock markets in 2019 as the research samples, and uses the market model to study the impact of the disclosure of cash dividend, mixed dividend and non-dividend policy on the stock price of the company. Study found that the announcement of the cash dividend policy did not cause the significant increase or decrease of stock prices. China's unique "semi-mandatory dividend policy" makes information conveyed by the disclosure of domestic cash dividend policy is different from the western scholars research and have it’s own new connotation. The "semi-mandatory dividend policy" makes it more difficult for investors to interpret the message of dividend policy and make rational decisions. At the same time，it also makes the market reaction of dividend policy more complicated in the further study. The announcement of mixed dividend policy and non-dividend policy caused a significant rise in stock prices. The CAR (-2, 2) of the companies’ stock with non-dividend policy have the highest average. The results show that China's capital market is more keen on stock speculation. The "speculation" and "arbitrage" behavior of institutional or individual investors on stocks will have a certain impact on the stock price after the announcement of dividend policy. Based on the relevant conclusions of the empirical study and combined with China's relevant policies, his thesis makes an in-depth analysis of the reasons why the disclosure of cash dividend, mixed dividend and non-dividend policy affects the stock price.