The Effect of Dividends on Stock Prices Evidence from the Finnish Stock Market

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School of Business | Bachelor's thesis
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Date

2025

Department

Rahoituksen laitos

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Mcode

Degree programme

Rahoitus

Language

en

Pages

22

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Abstract

In this thesis I examine the ex-dividend price behavior of stocks listed in the Helsinki Stock Exchange between 2015 and 2024. Using an event study approach, I find that on average, the stock prices decline by 74% of the dividend amount. This underreaction is consistent with previous studies, supporting the idea that different tax treatments across investor types influence the price movement. Furthermore, I examine whether domestic household investors can profit from short-term trading around the ex-dividend date. The results indicate that such profits are possible, even after transaction costs.

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Thesis advisor

Keloharju, Matti

Keywords

dividends, ex-dividend premium, price drop ratio, osinko

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https://urn.fi/URN:NBN:fi:aalto-202505254043

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