Asian Journal of Finance & Accounting ISSN 1946-052X 2013, Vol. 5, No. 2 www.macrothink.org/ajfa 256 Market Reaction to Bonus Announcement in Post Global Financial Crisis Era: Evidence from India Mayank Joshipura Mayank Joshipura is Professor (Finance) at School of Business Management NMIMS University, Mumbai, India Nusrathunnisa School of Business, Alliance University, Bangalore, India Received: Sep. 26, 2013 Accepted: November 18, 2013 Published: December 1, 2013 doi:10.5296/ajfa.v5i2.4328 URL: http://dx.doi.org/10.5296/ajfa.v5i2.4328 Abstract This study examines the stock price reaction contiguous with bonus announcement surrounding its announcement and effective day in post global financial crisis period. Sample of 74 bonus announcements from the constituents of Indian CNX 500 companies that announced bonus have been used for the period between 2008 through 2012. The standard event study methodology has been used. According to semi-strong form of efficient market hypothesis any information content associated with bonus announcement must be reflected in form of abnormal return on announcement day itself. However, several studies, report positive abnormal returns associated with bonus surrounding announcement as well as effective days. This study reports statistically significant positive abnormal return surrounding announcement as well as effective day and it is consistent with earlier studies. Keywords: Bonus Announcement, Market Efficiency, Event Study, Stock Dividend, Market Reaction JEL Classification: G14