Volume : V, Issue : IV, April - 2015

Dividend Distribution Can be a Tool to Make Undue Profit in Information Asymmetry Market

Sarathbabu . A

Abstract :

 Dividend policy involves extremely important financial decisions which serve as a basis of numerous theories. However, these theories have been developed in different fields, and according to some evidence 

dividend policy remains a kind of dilemma in the financial cycles of corporations. This paper analyses the price reaction to cash dividend distributions by firms listed on the National Stock Exchange on both the announcement and the 
ex–dividend day. As per the signaling effect, dividend distributions are indicators of future cash flow of the company. 
However, this paper established that how companies take advantage of the effect to boost share price in the short run 
and information asymmetry can lead to undue profit for inside traders.

Keywords :

Article: Download PDF   DOI : 10.36106/ijar  

Cite This Article:

SarathBabu .A Dividend Distribution Can be a Tool to Make Undue Profit in Information Asymmetry Market Indian Journal of Applied Research, Vol.5, Issue : 4 April 2015


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