Abstract
This study is carried out with aim of testing the relationship between dividend policy decisions (DP) on share price Volatility (SPV) of Modaraba Companies quoted in PSX. The data for empirical analysis was collected from PSX, Brecorder archive and Ksestocks.com. By using sampling technique, a sample of 19 Modaaraba Companies was taken from 2010 to 2018. Empirical analysis conducted by using multiple regression technique by employing fixed effect model on panel data. This study also incorporated four control variables (size, growth, operating earning & level of debt) in empirical analysis to avoid the problems of multicolinearity between dividend policy measures and spurious regression. The results of the study validate the theory of relevance of dividend policy decisions on SPV. Dividend policy has a negative and significant bearing on Stock price volatile. Higher leverage (debt level) leads to higher instability in stock prices. Firm earning volatility is positively associated with share price volatility. Firm size and firm’s growth in terms of assets also has negative but insignificant impact on SPV.
Muhammad Siddique, Kamran Al. (2020) Effect of Dividend Policy Decision on Share Price Volatility (SPV) of Modaraba Companies Listed in Pakistan Stock Exchange (PSX), Journal of Independent Studies and Research-Management, Social Sciences and Economics, Volume-18, Issue-2.
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