scholarly journals A systematic review of dividend policy in relation to stock price volatility

2021 ◽  
Vol 6 (1) ◽  
pp. 92-104
Author(s):  
Sheena Bhatta ◽  
Bal Ram Duwal
Keyword(s):  
Stock Price ◽  
Dividend Policy ◽  
Stock Exchange ◽  
Negative Relationship ◽  
Price Volatility ◽  
Manufacturing Companies ◽  
Dividend Yield ◽  
Stock Price Volatility ◽  
Dividend Payout ◽  
The Impact

When it comes to determining a dividend policy that would maximize shareholder value, focusing merely on how much of the firm’s profit is necessary for dividend distribution and reinvestment is insufficient. It is critical to analyze the impact of their dividend choice on the stock price.The purpose of this study is to scrutinize the impact of dividend policy on stock price volatility. The report investigated the relationship between the dividend policy and stock price volatility taking 8 articles between 2010 to 2020. Likewise, following a systematic literature review method, the study critically analyzed the selected articles based on their strengths and weaknesses. The findings suggest that, in most of the cases demonstrated by authors, dividend policy has a significant negative relationship with the stock price volatility. The stock’s price volatility often decreases after the declaration of dividend payout ratio and dividend yield. Based on the results of this study, it can be implied that, managers of manufacturing companies and banks, those listed in the stock exchange, may be able to reduce the price volatility of their stock by increasing dividend payout and dividend yield. Since the study is limited to 4 databases, further studies could include some more articles from top-rated databases that signify dividend policy in diverse sectors to derive even more accurate results.

scholarly journals PENGARUH KEBIJAKAN DIVIDEN TERHADAP VOLATILITAS HARGA SAHAM DENGAN INFLASI SEBAGAI VARIABEL MODERASI

2020 ◽  
Vol 2 (2) ◽  
pp. 85-94
Author(s):  
Patricia Maurin Aten ◽  
Dade Nurdiniah
Keyword(s):  
Stock Price ◽  
Sampling Method ◽  
Stock Exchange ◽  
Price Volatility ◽  
Financial Statements ◽  
Annual Reports ◽  
Manufacturing Companies ◽  
Dividend Yield ◽  
Stock Price Volatility ◽  
Dividend Payout

This study aims to analyze the effect of dividend payout ratio and dividend yield on stock price volatility with inflation as a moderating variable in manufacturing companies listed on the Indonesia Stock Exchange for the period 2013-2017. Documentary data (secondary) from financial statements and annual reports are used in this study. The population of this study includes manufacturing companies listed on the Stock Exchange from 2013-2017 and IPOs at least from 2013. The sampling method used in this study was purposive sampling, of which 44 companies were included in the criteria of this study. The analytical method carried out in this study is multiple regression. The results show that the variable that has a significant influence on stock price volatility is only the dividend payout ratio. The more dynamic the dividend payout ratio, the higher the stock price volatility, and vice versa. Research also shows the results that the inflation variable does not moderate the effect of dividend payout ratio and dividend yield on stock price volatility. Keywords: dividend payout ratio, dividend yield, stock price volatility, inflation

scholarly journals Influence of dividend policy on sharia stock price volatility

2020 ◽  
Vol 9 (7) ◽  
pp. 84-92
Author(s):  
Irton Irton
Keyword(s):  
Stock Price ◽  
Dividend Policy ◽  
Stock Exchange ◽  
Hypothesis Test ◽  
Price Volatility ◽  
Secondary Data ◽  
Stock Index ◽  
Dividend Yield ◽  
Stock Price Volatility ◽  
Dividend Payout

The main object of this research is to examine whether dividend policy in the form of dividend payout ratio and dividend yield influences the volatility of sharia stock price in the Indonesian Stock Exchange. This research uses the quantitative method by using the secondary data collected from the published Indonesian Stock Exchange. The sample in this research is 106 companies registered in the Indonesian Sharia Stock Index (ISSI) in 2016-2018. The dependent variable in this research is stock price volatility while the independent variables are dividend payout ratio, dividend yield, and data of earnings volatility, debt, and size that are collected and processed from the company financial report. Multiplied regression analysis is used for correlation test and hypothesis test using the SPSS software program version 15.0. The result of the research shows a shred of evidence that dividend per share and dividend payout ratio have no influence on the stock price volatility. The result of research can help the investors to select the sharia shares, and for companies, this research is useful to determine the dividend policy

scholarly journals The impacts of dividend policy and foreign ownership on stock price volatility of Vietnamese listed firms

2020 ◽  
Vol 4 (4) ◽  
pp. First
Author(s):  
Truc Thi Thanh To ◽  
Ho Thi Hong Minh ◽  
Phan Thi Kieu Hoa ◽  
Tran Hoai Nam
Keyword(s):  
Stock Price ◽  
Dividend Policy ◽  
Negative Relationship ◽  
Price Volatility ◽  
Foreign Ownership ◽  
State Ownership ◽  
Dividend Yield ◽  
Stock Price Volatility ◽  
Listed Firms ◽  
The Impact

The paper investigates the effects of dividend policy and foreign ownership on stock price volatility of Vietnamese listed firms by using multivariate regression analysis. Besides, the impact of foreign ownership on the association between the dividend policy and the stock price volatility is also studied. The Baskin's approach is deployed to measure the stock price volatility while dividend yield and payout ratio are proxies for the dividend policy. The data sample includes 420 firms listed on the HSX and HNX for 10 years, from 2009 to 2018. The FEM and PCSE are applied to examine the panel dataset with 4045 observations. The key findings indicate that both dividend yield and payout ratio are negatively correlated with stock price volatility. Besides, the stock price volatility of firms with higher dividend payments and a greater rate of foreign ownership is less volatile than those of other companies. Foreign ownership stimulates the negative relationship between dividend yield and stock price volatility, implying that foreign ownership also plays a crucial role in the stability of the stock price. Finally, the results illustrate that the volatility of earnings and the debt ratio are positively related to stock price fluctuation, while the business size and state ownership indicate negative associations with the variability of the stock price.

Dividend policy and stock price volatility of industrial products firms in Malaysia

2018 ◽  
Vol 13 (1) ◽  
pp. 203-217 ◽  
Author(s):  
Rozaimah Zainudin ◽  
Nurul Shahnaz Mahdzan ◽  
Chee Hong Yet
Keyword(s):  
Stock Price ◽  
Dividend Policy ◽  
Price Volatility ◽  
Industrial Products ◽  
Stock Price Volatility ◽  
Dividend Payout ◽  
Content Type ◽  
Crisis Period ◽  
The Impact ◽  
The Relationship

Purpose The purpose of this paper is to analyse the relationship between stock price volatility (SPV) and dividend policy of industrial products firms listed on Bursa Malaysia. Design/methodology/approach The sample comprises 166 industrial products public-listed firms covering a time span from year 2003 to 2012. Using Baskin’s framework, firm’s SPV is related to dividend payout, controlling for earnings volatility, firm size, leverage and growth of assets. Further, the impact of the global financial crisis on the relationship between SPV and the tested variables is examined. Findings Earning volatility significantly explains SPV of industrial product firms during the crisis period, while dividend payout ratio (PR) predominantly influences volatility during pre- and post-crisis sub-periods. The empirical results indicate that dividend policy is a strong predictor of SPV of industrial products firms in Malaysia, particularly during the post-crisis period. Originality/value The paper explores the firm’s SPV and dividend policy for a new set of data focussing on industrial products firms listed on the Malaysian Stock Exchange.

scholarly journals Impact of dividend policy on stock price volatility and market value of the firm: evidence from Sri Lankan manufacturing companies

2016 ◽  
Vol 13 (3) ◽  
pp. 219-225 ◽  
Author(s):  
UGVDD Gunarathne ◽  
WAN Priyadarshanie ◽  
SMRK Samarakoon
Keyword(s):  
Dividend Policy ◽  
Negative Impact ◽  
Price Volatility ◽  
Market Value ◽  
Share Price ◽  
Sri Lankan ◽  
Manufacturing Companies ◽  
Dividend Yield ◽  
Dividend Payout ◽  
The Impact

The impact resulted from the dividend policy of a firm on the volatility of the market value of stocks is the major concern of this study, which is an issue bearing an utmost significance, when considering the objectives of a corporate. The focus of an entity should be aligned on the maximization of stock holders’ wealth and this necessitates the selection of an optimum dividend policy. The present study, thus, attempts to shed a light on the above fact within the Sri Lankan context. Data was collected from a sample of companies listed under the manufacturing sector of the Colombo Stock Exchange from year 2006 to 2014. The study occupied panel data regression model for analysis. The outcome revealed that the dividend yield of the current year has a negative impact on the share price volatility, while the dividend payout ratio of both the current and previous years has a positive impact. In addition, the impact of dividend yield is negative on the market value of the firm, where the dividend payout ratio of the current year is also depicts the same impact. The findings of the study reassure the findings of the previous researchers within the Sri Lankan context in case of the market value of the firm while being contrary in case of the share price volatility. Accordingly, the firms’ ability of utilizing the dividend policy as a mechanism of controlling the volatility of share prices is established. However, it will not be effective in altering the market value of the firm.

scholarly journals The impacts of IPO financing and monetary policy on economic growth in Bangladesh: Evidence from a dynamic assessment

2021 ◽  
Vol 1 (1) ◽  
Author(s):  
Sagira Sultana Provaty
Keyword(s):  
Stock Price ◽  
Dividend Policy ◽  
Service Industry ◽  
Dynamic Assessment ◽  
Price Volatility ◽  
Dividend Yield ◽  
Stock Price Volatility ◽  
Independent Variables ◽  
The Impact ◽  
The Relationship

The impact of dividend policy on stock price volatility is one of the most researched topics of corporate finance. This study investigates the relationship between stock price volatility and dividend policy among Bangladeshi financial service industry companies. Two key variables - dividend yield and dividend payout have been taken as the independent variables after controlling for firm size, asset growth, earnings volatility, long-term debt, and earnings per share. The stock price volatility has been taken as the dependent variable. Panel regression analysis is employed to explore the relationship of dependent with independent variables. Results reveal a significant positive relationship between stock price volatility and dividend yield among companies considered in this study. This study will help regulators and investors understand how the stock price fluctuates in response to financial information such as dividend announcements

scholarly journals Pengaruh Dividend Yield dan Earning Volatility terhadap Volativitas Harga Saham di Bursa Efek Jakarta

2012 ◽  
Vol 3 (2) ◽  
pp. 665
Author(s):  
Rani Ramdhani
Keyword(s):  
Stock Price ◽  
Dividend Policy ◽  
Stock Exchange ◽  
Price Volatility ◽  
Capital Gain ◽  
Dividend Yield ◽  
Stock Price Volatility ◽  
Earnings Volatility ◽  
Information Signal ◽  
The Future

Some investors prefer dividend yield than capital gain, information signal follows to dividend policy that describes the earnings volatility in the future, which affects the stock price volatility on the Jakarta Stock Exchange.

scholarly journals The Impact of Dividend Policy on the Relationship Between Institutional Ownership and Stock Price Volatility: Evidence from Pakistan

2013 ◽  
Vol 2 (1) ◽  
pp. 111-132
Author(s):  
Atif Hussain
Keyword(s):  
Stock Price ◽  
Fixed Effects ◽  
Dividend Policy ◽  
Stock Exchange ◽  
Price Volatility ◽  
Institutional Ownership ◽  
Fixed Effects Model ◽  
Stock Price Volatility ◽  
The Impact ◽  
The Relationship

This study aims to determine the effects of dividend policy on the relationship between institutional ownership and stock price volatility, based on a sample of 36 firms listed on the Karachi Stock Exchange over a seven-year period (2005–11). We use a fixed-effects model applied to panel data to investigate this relationship and find that institutional ownership has a negative relation with stock price volatility and a positive relation with the dividend payout ratio. The results also show that dividend payouts significantly affect the relationship between institutional ownership and stock price volatility. The mediating role of dividend policy between institutional ownership and stock price volatility reveals that institutional investors prefer to invest in low-volatility dividend-paying stock.

scholarly journals The accounting numbers and investment decisions in emerging markets

2015 ◽  
Vol 12 (2) ◽  
pp. 443-454
Author(s):  
Husni K. Al-Shattarat
Keyword(s):  
Transaction Costs ◽  
Stock Price ◽  
Dividend Policy ◽  
Price Volatility ◽  
University Education ◽  
Share Price ◽  
Dividend Yield ◽  
Stock Price Volatility ◽  
The Impact ◽  
The Relationship

The main objective of this study is to determine the impact of dividend policy on stock price in Kuwait Firms. the study adopts the quantitative technique, gathering data from official listed Kuwaiti companies. All non-financial firms listed in Kuwait Stock Exchange from 1994 to 2003 This study will be based on a cross-sectional regression analysis of the relationship between stock price volatility and dividend policy after controlling for firm size, earning volatility, leverage and asset growth. Both dividend policy measures (dividend yield and payout ratio) have significant impact on the share price volatility.and examines the influence of dividend policy on stock price volatility and suggests the use of the following control variables in testing the significance of the relationship between dividend yield and price volatility: operating earnings; size of the firm; level of debt financing; payout ratio; and level of growth. These variables have a clear impact on stock returns but also impact on dividend yield. ‘SPSS’ statistical package to run statistical tests and answer study questions. Basic descriptive statistics (Mean, Standard Deviations) and frequency distribution were computed for each variable/question. Ordinary Least Squares (OLS) coefficient estimates are used in this study. F-tests are used to test for the relationship between stock price volatility and dividend policy. The results show that preference for dividends is larger amongst older investors, compared to younger investors. Old investors and investors without university education all have a preference for dividends because of transaction costs. On the other hand, young investors and investors with a university education have less interest in dividends based on transaction costs. The results also suggest that the watch for dividends as a safeguard measure is still “old-fashioned”, even in light of the recent accounting scandals.The results also indicate that individual investors believe that dividend payments contain a signal about the profitability of the firm

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