Relationship between Stock Price Volatility And Dividend policy: Evidence from Pakistan Stock Exchange

Abstract

The aim of this investigation is to study the relationship of dividend policy with stock price volatility with the focus on non-financial companies that are listed on Pakistan Stock Exchange (PSX). The research covered a sample period from 2010 to 2017. The relationship of stock price volatility with dividend policy specifically studied by five independent variables namely dividend yield, dividend payout, firm size, leverage and growth in assets. Regression was applied for data analysis. The results of the study found that dividend yield significantly influences the stock price volatility for textile and pharmaceuticals for high capitalized and pharmaceuticals for low capitalized. Dividend Payout significantly influences for pharmaceuticals and oil & gas sector of high capitalized and textile, pharmaceuticals and oil & gas for low capitalized companies. The control variables of the study firm size significantly influences for textile sector of high capitalized and oil & gas for low capitalized companies.