We study the ex-dividend day behavior of Japanese stock prices for the
period 1983-87. We find that, contrary to previous findings, prices of exday
stocks drop by nearly the full amount of the dividend. However, ex-day
stocks shows an abnormal return. Also, for the many ex-dividend day stocks
that also go ex-rights on the same ex-day, we find that the return is on
average higher than that for stocks without rights issues. We thus conclude
that the ex-day behavior of Japanese stocks are qualitatively similar to that
of U. S. stocks.
*Published:
Journal of the Japanese and International Economies, 4(3): 401-427, December 1990.
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