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Dividend Policy And Stock Price Volatility Evidence From Bangladesh Pdf

dividend policy and stock price volatility evidence from bangladesh pdf

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Adjaoud, F. Allen, D. Dividend policy and stock price volatility: Australian evidence. Applied Financial Economics,, 6 2 , Baskin, J.

Dividend policy and stock price volatility: evidence from Bangladesh

To browse Academia. Skip to main content. By using our site, you agree to our collection of information through the use of cookies. To learn more, view our Privacy Policy. Log In Sign Up. Download Free PDF. Asaduzzaman Reaz. Bellal Hossain Raju. Download PDF. A short summary of this paper. Volume 8, Issue 3 Ver. Bellal Hossain Raju1, A. This paper intends to analyze the impact of dividend policy on the market price of stock in Bangladesh.

The numbers of statistic community are companies in Dhaka Stock Exchange. All 24 companies belong to Fuel, Power and Cement industry listed at DSEX index are included as the sample for a phase from to Both Models are exercised on panel data for explaining the association between dividend payments and share prices after adjusting several variables including Earnings per Share, logarithm value of Profit after Tax, Growth of Asset and Dividend Payout Ratio.

Afterward, this paper applied the multicollinearity test to determine is there any correlation among the variables and found no multicollinearity. This paper found a weak form market exists in Bangladesh and investors choose stock dividend more than the cash dividend. Introduction There are many broad research areas in finance. Among the areas, an important one is dividend policy, but the argument either dividend policy modifies stock prices or not remains questionable among administrators, decision makers, and scholars for several years.

The presence of dividend policy carries significance for financiers, administrators, bestowers and another one with a vested interest. Investors give supreme importance to dividend policy. They recognize dividends as the primary income source. Most importantly, they use dividend policy as a means of evaluating company from the investor's perspective. Through the use of dividend policy, a company can be valued to get the productive capacity of the business in the cash form or not.

Choosing a proper dividend policy always requires a critical arrangement for a company. It is because the volume of dividends paid or will pay to the stockholders determines the adaptability to spend on projects that will take place in future.

When any organization gives more dividends then, fewer funds will be free to invest in the forthcoming projects. Creditors like bond holders, debenture holders, are also concerned about the Return on Investment of the company.

If the company paid an excess Return on Equity then within a short time, it will fall on difficulties for managing operating and other expenses of the organization and also for the repayment of their debts.

The primary goal of the shareholder aims to the maximization of profit. A company's dividend policy influences the decisions of that company's investors toward earnings from the investment.

Maximizing profit of shareholders is the main intent focused on the dividend policy. Arnold [1] revealed that statement and also included this intent is achieved the highest outcome through increasing shareholders purchasing power. It is because this wealth would shape the purchasing ultimately consumption orders of shareholders. To the shareholders, the dividend payment is one of the significant elements of stock returns. It could present a sign to the investors that the firms are complying with good corporate governance practices or not.

Besides, the shift of share price is the systemic risk faced by the investors who grasp ordinary shares investment. The factors, which motivated this study is to obtain the influence of dividend policy on the stock price. The aspiration of the study is to determine the influence of dividend policy on the share prices of Fuel, Power and Cement sector in Bangladesh during to It is not only a matter of great importance to the management that what is the effect of a firm's dividend policy on the current stock price but also to the investors and economist.

Investors plan to make their portfolio by considering the dividend policy and economists seek to understand and make valuation the functioning of the capital market. Which DOI: Literature Review Among the crucial areas in Finance, dividend policy is one of them.

Previously, several researchers have carried studies over this area, which explains the association between dividend arrangement and share prices. Novel researchers can take benefits and insights from them to scrutinize the dividend policy to work further in their way. When someone talks about the dividend policy, the name of Lintner comes first. Lintner [2] appealed with the question having a great interest until now.

Later Modigliani and Miller [3] presented a theory about dividend policy. Their concept is popularly known as the theory of Dividend Irrelevance, which explains share prices are not influenced by the dividend policy. Several studies conducted by Black and Scholes [4], Chen, Firth and Gao [5], Adefila, Oladipo and Adeoti [6], Uddin and Chowdhury [7], Denis and Osobov [8], and Adesola and Okwong [9] presented substantial proof in backing the Dividend Irrelevance Approach and did not acknowledge it germane to share prices in the capital market.

Gordon [10] introduced the theory of Dividend Relevance representing the another sight of the dividend policy. Gordon firmly believed that the market value of stocks and the worth of the company are affected by the dividend policy. Dividend income is always considered secured by investors than capital gains. No relationship was attained between the dividend decision and share prices by Black and Scholes [4]. Barclay and Smith [16] published a paper about the maturity of business debt structure and stated that low growth firms have higher dividend payout ratio and level of debt than the high growth firms.

As a result, high dividend payout is got the priority of investors, and they regard capital gains riskier than dividend payout. Rachim and Allen [17] has found out no association with the yield of dividends and share market prices. They have been tested listed firms in Australia and found a positive correlation between the market price of stock and size of the firm with Earnings per Share and debt leverage and a negative correlation between share market prices and Dividend Payout Ratio.

Besides, Baskin [18] examined listed firms in USA market from the phase of 20 years. In his examination, he got share price and dividend yield has a substantial negative correlation. Ho [19] performed a study using panel data method and fixed effect model, which is pertinent to the dividend policy.

Besides, a negative relation was found between the risk of Japanese organizations and the dividend policy. Pradhan [20] explicated the influence of retained earnings and dividends payout on the stock prices in Nepal Stock Exchange Limited.

The findings of his work showed dividend payout has a strong correlation with the price of the share. His study also stated that stock price has very feeble relation with retained earnings. His study further described that Nepalese investors prefer dividends earning rather than capital gain. Nishat and Irfan [21] conducted a study of firms enlisted in the Stock Exchange of Pakistan covering from to Regression analysis among exploded views had been used in their study and found the stock market price is positively involved with dividend income and dividend payout ratio.

Adeoti, Oladipo, and Adefila [6] analyzed some Nigerian companies to have influential factors on the dividend decision and policy. Their analysis found Nigerian companies choose continuous dividend payments to resemble expectations of stockholders. Their study did not find any significant involvement among dividend payouts, comprehensive income and market prices of stock. Additionally, their study found a vital positive relationship between dividend payments and Debt Equity Ratio.

The managers in Norway are shaping dividend policy by using survey method. A study on the Ghana Stock Exchange carried by Amidu [23] showed the impact of the dividend payments on the achievement of the firms. In his study, a positive association was found between dividend policy, earnings from assets and sales growth while a negative relationship was found between earnings from assets, leverage, and Dividend Payout Ratio.

For the period from to one more study performed by Hedensted and Raballe [24] in Denmark. Their study recognized a positive correlation between net income of the firms and Cash Dividends, non-distributed earnings, Return on Equity and dimension of the firm but DOI: Adesola and Okwong [9] obtained a result about the aspects influencing the divided policies based on the practical data of Nigerian firms.

Another study performed to find out the effect of policy associated with dividend on the price of the share by Hussainey, Mgbame and Chijoke-Mgbame [26]. The findings of their paper explored that share price movements have an active link with dividend income and a negative link with Dividend Payout Ratio.

Powell and Baker [27] acquired the views of managers of Indonesia about the determinants affecting on dividend decisions, issuances of dividend and clarification for dividend payments.

In Bangladesh, Al-Hasan, Asaduzzaman and Karim [28] performed a study of 28 companies from automobile, cement, textile and pharmacy industry listed in DSE. They found a significant association between the market price per share and dividend per share. Their analysis also showed that dividend policy has a substantial impact on the market price per share.

Another study conducted by Mamun, Haque and Ahshanul [29] found that dividend disbursement convey a message to the market, which could adjust share price but market failed to adjust accordingly in a balanced way for the firms they studied. The results they found are similar to the results found in an earlier study on the capital market of Bangladesh conducted by Uddin and Chowdhury [7].

To measure the SPV, annual maximum and minimum share prices of the respective year are used by following method developed by Parkinson [30]. The given formula is used to obtain the SPV. Cash Dividend CD is the primary type of dividend payment. CD has the direct link with stock prices either positive or negative. Mogere [31] found a weak, insignificant relationship between CD and stock prices.

One of the important types of the dividend is Stock Dividend SD. The views of the shareholders can be seen when SD declared, and it can be reflected in the share price. It has an influence on stock price and may show a positive or negative reflection. Another important variable, Profit after Tax may also be known as net income is used in this paper. It has a positive and meaningful relationship with stock price. To get the value of EPS elaborately Earnings per Share, at first preferred stock is subtracted from the net income.

Afterward, the outcome is divided by the total number of shares outstanding.

The Relationship Of Dividend Policy and Share Price Volatility: A Case in Vietnam

Get Mendeley Web Importer:. Join a global community of researchers using Kudos:. Indian capital market have surpassed a sea change in the recent past including demonetization, implementation of new tax regimes, political controversies and the like. Despite these facts, the Indian capital markets soars at many a times due to its active trading. Against this backdrop, this research paper seeks to examine the relationship between dividend policies and share price volatility. The motivation behind this research is to first time employ a powerful unbiased volatility estimator, created by Yang and Zhang that is 14 times as efficient as close to close estimate. A sample of textiles companies, listed and actively traded in Bombay Stock Exchange of India BSE from to selected for the study.

dividend policy and stock price volatility evidence from bangladesh pdf

PDF | The objective of this study is to examine the relationship between share share price volatility (SPV) and firm's dividend policy on the Sri Lankan stock Bangladesh', Journal of Applied Business and Economics, Vol.


Effect of Dividend Policy on Stock Prices

Skip to search form Skip to main content You are currently offline. Some features of the site may not work correctly. Corporate dividend policy is mysterious and one of the puzzles in corporate finance. This study seeks to examine the relationship between dividend policy and stock price volatility. By using the cross-sectional regression analysis after controlling for earning volatility, payout ratio, debt, firm size and growth in assets, this paper identifies that there is an evidence of positive, but non-significant relationship between stock price volatility and dividend yield.

Dividend Policy and Stock Price Volatility: Evidence from Bangladesh

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Идиот! - Она замахала бумагой.  - Он обошел Сквозь строй. Посмотри. Бринкерхофф растерянно постоял минутку, затем подбежал к окну и встал рядом с Мидж. Та показала ему последние строчки текста.

 - Мы должны позвать людей на помощь. Нам обоим грозит опасность. Сьюзан не верила ни единому его слову.

Бринкерхофф не уходил с дороги. - Это тебе велел Фонтейн? - спросила. Бринкерхофф отвернулся.

Ты нужна. Яростная волна гнева захлестнула. Она снова услышала голос Дэвида: Я люблю .

Дэвид исчез. Значит, приснилось, подумала Сьюзан и села в кровати. Комната в викторианском стиле, сплошь кружева и антиквариат - лучший гостиничный номер в Стоун-Мэнор.

Повернувшись, он направился через фойе к выходу, где находилось вишневое бюро, которое привлекло его внимание, когда он входил. На нем располагался щедрый набор фирменных открыток отеля, почтовая бумага, конверты и ручки. Беккер вложил в конверт чистый листок бумаги, надписал его всего одним словом: Росио - и вернулся к консьержу.

 - Может, пройдем, чтобы я смог вам это доказать. - Не стану вас затруднять, - ухмыльнулась она, - благодарю за предложение. Но все же кто. Беккер держался своей легенды: - Я из севильской полиции.

Но директор давным-давно взял за правило умывать руки, позволяя своим умным сотрудникам заниматься своим делом, - именно так он вел себя по отношению к Тревору Стратмору. - Мидж, тебе отлично известно, что Стратмор всего себя отдает работе. Он относится к ТРАНСТЕКСТУ как к священной корове. Мидж кивнула.

 Мидж, ну пожалуйста, успокойся. Ты знаешь, что я не могу… Она фыркнула и снова повернулась к клавиатуре.

5 Comments

  1. France P.

    04.05.2021 at 06:22
    Reply

    This study seeks to examine the relationship between dividend policy and stock price volatility. Therefore, the managers may not employ the dividend policy to influence their stock's risk. The influence of stock price risk through dividend may be also ambiguous due to the inefficient capital market in Bangladesh.

  2. Canela Z.

    07.05.2021 at 18:42
    Reply

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  3. Algiso A.

    09.05.2021 at 07:28
    Reply

    Dividend Policy and Stock Price Volatility: Evidence from Bangladesh · Tables from this paper · Tables · Citation Type · References · Related Papers.

  4. Derick C.

    10.05.2021 at 03:47
    Reply

    The method of analysis is in two stages.

  5. Samantha M.

    11.05.2021 at 22:38
    Reply

    PDF | Numerous studies has been conducted in the area of dividend policy, yet little were made to find Dividend policy and share price volatility: Evidence from Malaysia country such as Bangladesh by [6] reports a result.

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