Abstract:
Stock prices are always affected by corporate action and any that can be news perceived by the market as good or bad. Dividends is important to investors as it is one of the way they get return on their investments. Thus, dividend information has a potent effect on stock return variability. The study adopted an event study research design approach on a target population of 23 firms listed at the KSE. Secondary data on the firms" stock prices was collected for 30 days fluctuation of dividend announcement for year (2016-2017). The study sampled 23 Finns which bad consistent dividend policies. The study used GARCH model to examine variability by determining the heteroskedasticity in the returns. The study established that there were significant differences in the stock return fluctu action of dividend announcement. Conducting a GARCH (p.q) model. significant results were established pointing to a GARCH effect in the stock return volatility.
