The effect of dividend distribution decisions on share performance: An application in Borsa Istanbul 100-index

The decision to pay dividends made by companies is a factor that affects the value of the company. Because stock investors prefer companies that regularly distribute dividends for investment. Therefore, announcing that companies will distribute dividends to the public means that stock investors will increase the demand for the stock of the relevant company and thus increase the market value of the stock. The efficient market hypothesis expresses the view that the information disclosed to the public in a "semi-strong form efficient" market will not cause an abnormal return on the stocks of the companies. In other words, he argues that even an important event such as dividend distribution will not affect the stock price. The aim of this study is to measure the reaction of the investors to the dividend distribution decisions of the companies and the effect on the market value of the companies in question using the event study method. In practice, the analysis was made in the light of the data of companies that consistently distributed dividends in the BIST-100 index between the years 2016-2020. As a result of the analysis, it was concluded that the reaction of the investors to the event in the dividend distribution period was positive, negative and unrelated. It is concluded that the firms have cumulative average abnormal returns and thus affect the firm's stock prices and value. In addition, according to the efficient markets hypothesis, it has been determined that stock markets are not efficient even in semi-strong form.