Government grants and the impact of dividend announcements on firms’ stock priceIchev, Riste (Avtor) investmentsdividendspandemicgovernment grantsCOVID-19dividend announcementinvestor sentimentstock marketsThis study empirically examines the impact of media-reported dividend an- nouncements on the stock returns of US public firms receiving a COVID-19- related one-time government grant. While COVID-19 continued devastating the economy, public firm borrowers that decided to pay out dividends while using government support, exhibited a negative Cumulative Abnormal Return (CAR) of −5.3% around the announcement day. In contrast, investors’ reac- tion to firms announcing discontinuation of dividend payments while re- ceiving COVID-19 grants, results in a much milder CAR of ≈ −1.2%. Firm size, leverage, cash/assets, ESG score, and the media coverage proxy influence significantly the returns during the period.20242025-06-26 14:18:27Članek v reviji169962UDK: 658.152ISSN pri članku: 2162-2078DOI: 10.4236/tel.2024.143049COBISS_ID: 199652867sl