Dividend and Stock Repurchase Announcement in Tunisia: A Signaling Approach
The objective of the present paper is to add the understanding of stock price reaction at two kinds of events: (1) The announcement of dividend and (2) the announcement of stock repurchase. To do so we develop a traditional event studies. In the case of the first kind of event, the results obtained are not consistent with information content of dividend: The market does not react significantly to the announcement of dividend. Although a negative reaction is observed when the announcement is a decrease of dividend level. This announcement may be interpreted as a negative signal. For stock repurchase announcement also, we do not observe significant reaction of the market around the event period but a significant and a negative reaction is observed over the event period. This results do not support the signaling theory the Tunisian market may be fully anticipate ant that so incorporate this events on the market price.
