The Disruptive Effect of COVID-19 on the Informativeness of Dividend Increases: Some Evidence from Johannesburg Stock Exchange-Listed Companies

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COVID-19 on the Informativeness of Dividend Increases: Some Evidence from Johannesburg Stock Exchange-Listed Companies</title> <meta name="description" content="The Disruptive Effect of COVID-19 on the Informativeness of Dividend Increases: Some Evidence from Johannesburg Stock Exchange-Listed Companies"> <meta name="keywords" content="cumulative abnormal returns, dividend increases, event study methodology, signalling"> <meta name="viewport" content="width=device-width, initial-scale=1, minimum-scale=1, maximum-scale=1, user-scalable=no"> <meta charset="utf-8"> <link href="https://cdn.waset.org/favicon.ico" type="image/x-icon" rel="shortcut icon"> <link href="https://cdn.waset.org/static/plugins/bootstrap-4.2.1/css/bootstrap.min.css" rel="stylesheet"> <link href="https://cdn.waset.org/static/plugins/fontawesome/css/all.min.css" rel="stylesheet"> <link href="https://cdn.waset.org/static/css/site.css?v=150220211555" rel="stylesheet"> </head> <body> <header> <div class="container"> <nav 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class="card"> <div class="card-body"><strong>Paper Count:</strong> 87359</div> </div> </div> </div> <div class="card publication-listing mt-3 mb-3"> <h5 class="card-header" style="font-size:.9rem">The Disruptive Effect of COVID-19 on the Informativeness of Dividend Increases: Some Evidence from Johannesburg Stock Exchange-Listed Companies</h5> <div class="card-body"> <p class="card-text"><strong>Authors:</strong> <a href="https://publications.waset.org/abstracts/search?q=Faustina%20Masocha">Faustina Masocha</a> </p> <p class="card-text"><strong>Abstract:</strong></p> This study sought to determine if the Covid-19 pandemic played a disruptive role in the signalling effect of dividend increases for the Top 40 companies listed on the Johannesburg Stock Exchange. With the use of Event Study Methodologies, it was found that dividend increases that were announced in the 2018 and 2019 financial years resulted in Cumulative Abnormal Returns (CARs) that were significantly different from zero, as confirmed by a p-value of 0,0300. This resulted in the conclusion that, under normal circumstances, dividend increases follow the precepts outlined in signalling theories which indicate that the announcement of dividend increases sent positive signals about the expected financial performance of a company. To prove the notion that Covid-19 plays a disruptive role on the signalling hypothesis, it was found from both parametric and non-parametric tests of significance that CARs related to dividend increases that were announced during the 2020 and 2021 financial years, when the Covid-19 pandemic was at its peak, were not significantly different from zero. Therefore, although the dividend increases still resulted in some CARs, such CARs were not statistically different from zero to confirm the signalling hypothesis. A p-value of 0.9830 from parametric t-tests and a p-value of 0.8971 from the Wilcoxon signed-rank test were used as a gauge that led to the conclusion that Covid-19 plays a disruptive effect on the signalling process of dividend increases. <iframe src="https://publications.waset.org/abstracts/152301.pdf" style="width:100%; height:400px;" frameborder="0"></iframe> <p class="card-text"><strong>Keywords:</strong> <a href="https://publications.waset.org/abstracts/search?q=cumulative%20abnormal%20returns" title="cumulative abnormal returns">cumulative abnormal returns</a>, <a href="https://publications.waset.org/abstracts/search?q=dividend%20increases" title=" dividend increases"> dividend increases</a>, <a href="https://publications.waset.org/abstracts/search?q=event%20study%20methodology" title=" event study methodology"> event study methodology</a>, <a href="https://publications.waset.org/abstracts/search?q=signalling" title=" signalling"> signalling</a> </p> <a href="https://publications.waset.org/abstracts/152301/the-disruptive-effect-of-covid-19-on-the-informativeness-of-dividend-increases-some-evidence-from-johannesburg-stock-exchange-listed-companies" class="btn btn-primary btn-sm">Procedia</a> <a href="https://publications.waset.org/abstracts/152301.pdf" target="_blank" class="btn btn-primary btn-sm">PDF</a> <span class="bg-info text-light px-1 py-1 float-right rounded"> Downloads <span class="badge badge-light">120</span> </span> </div> </div> </div> </main> <footer> <div id="infolinks" class="pt-3 pb-2"> <div class="container"> <div style="background-color:#f5f5f5;" class="p-3"> <div class="row"> <div class="col-md-2"> <ul class="list-unstyled"> About <li><a href="https://waset.org/page/support">About Us</a></li> <li><a href="https://waset.org/page/support#legal-information">Legal</a></li> <li><a target="_blank" rel="nofollow" href="https://publications.waset.org/static/files/WASET-16th-foundational-anniversary.pdf">WASET celebrates 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The Disruptive Effect of COVID-19 on the Informativeness of Dividend Increases: Some Evidence from Johannesburg Stock Exchange-Listed Companies