Dividend policy and stock price volatility: evidence from Bangladesh
Article
Article Title | Dividend policy and stock price volatility: evidence from Bangladesh |
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ERA Journal ID | 18562 |
Article Category | Article |
Authors | Rashid, Afzalur (Author) and Rahman, A. Z. M. Anisur (Author) |
Journal Title | Journal of Applied Business and Economics |
Journal Citation | 8 (4), pp. 71-81 |
Number of Pages | 11 |
Year | 2008 |
Place of Publication | Florida, United States |
ISSN | 1499-691X |
Web Address (URL) | http://www.na-businesspress.com/JABE/RashidWeb.pdf |
Abstract | 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. An important implication of this study is that, the share price reaction to the earnings announcement is not similar to that of other developed countries. 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. This paper contributes to reducing the dearth of studies on dividend and stock price volatility in emerging economies. |
Keywords | dividend policy; stock volatility |
ANZSRC Field of Research 2020 | 350208. Investment and risk management |
350299. Banking, finance and investment not elsewhere classified | |
380107. Financial economics | |
Public Notes | Files associated with this item cannot be displayed due to copyright restrictions. |
Byline Affiliations | Abu Dhabi University, United Arab Emirates |
University of Dhaka, Bangladesh |
https://research.usq.edu.au/item/q02q3/dividend-policy-and-stock-price-volatility-evidence-from-bangladesh
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