IMPACT OF CASH DIVIDEND PAY-OUT ON STOCK PRICE VOLATILITY OF AUTOMOBILES FIRMS LISTED AT KARACHI STOCK EXCHANGE

Abstract

Purpose-The study is undertaken to know the impact of cash dividend payout on the stock price volatility of automobile industry of Pakistan. Five automobile assemblers and manufacturers were selected as sample and the stock price was taken on annual basis. Data of ten years is collected which covered the time span from 2006-2015. Methodology/samplc- Panel least square Model is used to examine the relationship between DPS, DY, and DPR with stock price volatility. Sample of five companies were used and data was taken for annual basis. Findings-The findings show that there is significant positive relationship between DPS and stock price. Whereas DY and DPR have negative relationship between stock prices, as DY and DPR increase, it decreases the stock prices of automobile companies. Practical Implications- The dividend payment and stock price is important performance indicator for any firm and the both have high importance for the investors. So there clear relationship will give a clear idea about the direction of firm growth, wealth of investors and future prosperity for investment.