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PROSPECTS OF VOLATILITY IN STOCK PRICES ON DIVIDEND ANNOUNCEMENTS IN AUTOMOBILE INDUSTRY

K. Thangamani, K. Kanniammal

Abstract


Dividend is a payment given to shareholders by corporate where the investment made by them. This happens when the corporate earns a profit and the distribution of dividend is paid as cash and issue of shares. Stock market is a marketplace where the buyers and sellers are trading their stocks (shares). Volatility is a measure of uncertainty that happen to stock prices. This paper investigates the prospects of volatility in stock prices on dividend announcements with special reference to automobile industry. Twenty days event window is considered for the selected automobile companies in BSE listings. This study employs GARCH model to assess the stochastic volatility. Findings of this study reveal the impact of dividend announcement on stock prices and it is useful for investors.

Keywords


Stock market, Volatility, Event Window, Dividend Announcements, Automobile Industry, Stock prices.

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