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MARKET REACTION TO STOCK DIVIDENDS The stock dividend is the amount received as payment for being a stockholder if a certain company. It is paid by both the public and the private companies. By reaction to the stock dividend, the theory strives to infer that the participants in the stock exchange do not act upon information based upon the amounts of dividends paid out by a company. Although a good indicator of a company’s profitability, dividends are prone to be changed by a number of things. Such things may include the company’s decision to plow back profits or external factors such as economic conditions. Thus in an information-efficient capital market, the stock dividends act more as news than information and are thus rarely acted upon by the stock markets participants. Amazon.com, Inc. is an online based company that sells anything and everything when it comes to the interest of the consumer. The store offers online solutions for all of the client’s defender supply-demand needs. The company is registered in the stock market with its stocks being called AMZN. In the year 2016, the organization had more than two hundred thousand employees and registered a growth in revenue for the second quarter of the year. Undeniably the year 2015 was an exceptionally rosy year for the E-retail giant Amazon.com Inc. As of October 2015, the stock prices had experienced an 118% gain selling at $ 549.88. The earnings per share at the time $ 1.88. The increase in earnings per share was as a result of a similar increase in sales revenues standing at 36 million US dollars. At the time the dividends issued increased due to the tremendous increase in profits. As a result, the share
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