Dividend Policy and Share Price volatility: Evidence From Pakistan Stock Exchange of Listed Commercial Banks

Abstract

This study examines the all possible dividend policy effect on commercial banks stock price listed at Pakistan stock exchange. The study covers 17 listed commercial banks for the time period 2014 to 2017. To analyze secondary data multiple regression analysis was applied using Stata with the model (MP) Market Price Per Share as the dependent variable and (EPS) Earning Per Share, (ROE) Return on Equity, (RR) Retention Ratio and (DY) Dividend Yield are independent variables. Descriptive statistics were applied to data to check mean, median, maximum and minimum value. The finding of the study shows that EPS shows a highly significant positive impact on the share MP and the other three independent variable return on equity, dividend yields, and retention ratio also show a significant but negative impact on the share MP. These results support the finding of previous studies done by another researcher in the past.