Dividend Policy and Stock Price Volatility Evidence from Pakistan Stock Exchange of Listed Commercial Banks

Abstract

The study examines the effect of dividend policy effect on stock price volatility by taking all possible measures to check this relationship. For this purpose the study was conducted on the Pakistan stock exchange. Data was taken from the 18 commercial banks listed in the Pakistan stock market from the Period of 2016 to 2020. Multiple regression was applied to analyze the data. Share Price volatility was used as a dependent variable and Dividend Yield, retention ratio, Return on Equity and Earning per share used as an independent variable. Descriptive Statistics was applied to check the mean, STD, maximum and minimum value of the variable. Correlation between all the variables was also checked by the model. Our study found that Earning per share has a significant positive impact on the Share market price while all other variables show significant but negative impact on the share Price.