Dividend announcement have an impact on price reaction. This
research used dividend yield as an indicator of measuring the impact of
dividend announcement on stock price changes for manufacturing companies
in Indonesia Stock Exchange, which have high dividend yield and low dividend
yield during 2006-2008. To measure the price changes used parametric test
that is paired sample t-test two tailed and to measure the differentiation of the
mean on stock prices used descriptive statistics.
The result of this study revealed that there is a relation between
dividend announcement and stock price changes showed with the
differentiation of the mean on stock prices between 10 days before dividend
announcement and 10 days after dividend announcement, but the results are
different between high dividend manufacturing companies and low dividend
manufacturing companies.
Keywords: dividend announcement, dividend yield, price reaction.