The Relationship between Dividend Policy and Stock Price Volatility

Please enable javascript in your browser.

Baghbani, Masood | 2021

248 Viewed

Type of Document: M.Sc. Thesis
Language: Farsi
Document No: 54732 (44)
University: Sharif University of Technology
Department: Management and Economics
Advisor(s): Keshavarz Haddad, Gholam Reza; Abdoh Tabrizi, Hossein
Abstract:
The objective of this study is to explore the relationship between the stock price volatility and dividend policy (dividend yield and dividend payout ratio) for the Iranian stock market. According to the studies of Baskin (1989) and Allen and Rachim (1996), the fixed effect and random effect regression models are applied in this research. The sample of data is composed of 200 public firms which are listed on the Tehran Stock Exchange (TSE) and paid dividends continuously from 2010 to 2020. The results indicate that the dividend policy has a significantly negative relationship with the stock price volatility. In addition, the Size of the company is negatively related to the stock price volatility and it is a statistically significant relationship. As a result, managers can partly control the stocks’ risks and thus affect investors’ investment decisions through a firm’s dividend policies
Keywords:
Price Volatility ; Stock Price ; Dividend Payout Ratio ; Dividend Policy ; Dividend Yield ; Tehran Stock Exchange

No TOC