Impact of Corporate Announcements on Share Prices

The stock price movement is an area of research that has attracted attention of various academicians and scholars. Perhaps no other area of finance has been subject to so much empirical investigation during the last four decades as the behavior of stock prices. This paper attempts to contribute positively to the understanding of the behavior of Indian share prices in relation to various corporate announcements. Dividend announcements usually are considered as positive signals to shareholders and also is expected a positive impact on the share price. Yet, different announcements are expected to impact share prices differently. A standard methodology to study the influence of impact factors on the stock price movement is adopted in this paper to examine the price movements of 10 companies (listed on Bombay Stock Exchange) surrounding 30 days of announcement periods each for four corporate announcements viz. Stock split, Right Issue, Bonus Issue and Dividend.