Dividends and cash distributions and their effect on stock prices in the financial markets within the framework of signal theory / analytical study

Abstract

The research aims to test the effect of the synchronization of dividends announcements
and their dividends on stock prices and how the market evaluates the two signals in their
relationship with each other, within the framework of the signal theory, and test the
market’s ability to integrate the information announced in stock prices by adopting the
methodology of the event for the purpose of inferred purpose to the efficiency of the
market within the near-level The strong: The study sample includes (12) companies from
the companies listed in the Saudi financial market from various sectors that meet the
criteria for selection, for the period from (2007-2016), they formed approximately (83)
simultaneous events.
The research reached a set of conclusions, the most important of which is the presence
of a leak of new information that helped in achieving unusual returns of significant
significance in the session that preceded the day of the event, as well as a delay in
capturing information in the days that followed the event on the day of the event on some
of the subtotals of simultaneous profits announcements and distributions. And the absence
of a significant interaction effect of the declared profits and distributions on the average
cumulative extraordinary returns. The market evaluates the dividend signal separately
from the dividend signal.