Impact of Dividend Policy on Stock Price Volatility: An Empirical Study on Financial Service Industry of Bangladesh

Published Online: 9 December 2021 || Published in Print: 28 December 2021

Authors

  • Sagira Sultana Provaty Bangladesh Institute of Capital Market (BICM) Dhaka, Bangladesh Author
  • Khairul Alam Siddique Department of Finance University of Dhaka Dhaka, Bangladesh Author

DOI:

https://doi.org/10.54728/2112091639050253

Keywords:

Dividend Policy, Corporate Finance, Financial Service Industry, Stock Price Volatility

Abstract

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.

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Published

2021-12-09

Issue

Vol. 1 No. 1

Section

Articles

How to Cite

Sagira Sultana Provaty, & Khairul Alam Siddique. (2021). Impact of Dividend Policy on Stock Price Volatility: An Empirical Study on Financial Service Industry of Bangladesh: Published Online: 9 December 2021 || Published in Print: 28 December 2021. Journal of Financial Markets and Governance, 1(1), 16-32. https://doi.org/10.54728/2112091639050253