Abstract :
The purpose of this study is to examine the effect of dividend announcement on abnormal return and shares volume on growth and non growing firm. The research sample consisted of 37 firms. Growth and non growing firm is grouped by MVEBVE value. Market reactions to dividend announcement are examined by using event study methodology. In this study, market reactions seen from abnormal return and volume of shares. Statistical method used to test the hypothesis is t-test.
The result of this study shows that the market gives positive abnormal return to the announcement of dividend from growing firm. For non growing firm did not have significant reaction. The result for volume of shares in the growth and non growing firm was no significant increase or decrease after the announcement of dividend.
Keywords: Dividend announcement, abnormal return, market reactions,
trading volume activity, and growing firm.