Stock Price Volatility and Dividend Policy in Jordanian Firms PDF Download
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Author: Anas Al Qudah
Publisher:
ISBN:
Category :
Languages : en
Pages : 11
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Book Description
This paper examines the relationship between stock prices and dividend policy. To test the relationship, it uses multiple least square regressions for its analysis. The model developed for this research evaluates the relationship between dividend policy and stock price volatility over a span of ten years. The analysis utilizes multiple regressions to describe these relationships and also includes a correlation analysis amongst the variables chosen. The results conveyed a negative impact of the two components of the dividend policy that is D-P and D-Y on the share price volatility. This demonstrated that Jordanian industrial firms had their dividend yield rise, the stock prices tended to stabilize while the price volatility declined and thus lowers the share price risks. The results also demonstrated that higher payout ratios would mean low volatility of the stock price.
Author: Anas Al Qudah
Publisher:
ISBN:
Category :
Languages : en
Pages : 11
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Book Description
This paper examines the relationship between stock prices and dividend policy. To test the relationship, it uses multiple least square regressions for its analysis. The model developed for this research evaluates the relationship between dividend policy and stock price volatility over a span of ten years. The analysis utilizes multiple regressions to describe these relationships and also includes a correlation analysis amongst the variables chosen. The results conveyed a negative impact of the two components of the dividend policy that is D-P and D-Y on the share price volatility. This demonstrated that Jordanian industrial firms had their dividend yield rise, the stock prices tended to stabilize while the price volatility declined and thus lowers the share price risks. The results also demonstrated that higher payout ratios would mean low volatility of the stock price.
Author: David E. Allen
Publisher:
ISBN: 9781863422581
Category : Dividends
Languages : en
Pages : 36
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Book Description
Author: Deepa Gunaratne
Publisher:
ISBN:
Category :
Languages : en
Pages : 15
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Book Description
The impact resulted from the dividend policy of a firm, on the volatility of the market value of stocks, is the major concern of this study, which is an issue bearing an utmost significance, when considering the objectives of a corporate. The focus of an entity should be aligned, on the maximization of stock holders' wealth and this necessitates the selection of an optimum dividend policy. The present study, thus, attempts to shed a light on the above fact, within the Sri Lankan context. Data was collected from a sample of companies listed under the manufacturing sector of the Colombo Stock Exchange from year 2006 to 2014. The study occupied panel data regression model for analysis. The outcome revealed that, the dividend yield of the current year has a negative impact on the share price volatility, while the dividend payout ratio of both the current and previous years has a positive impact. In addition, the impact of dividend yield is negative on the market value of the firm, where the dividend payout ratio of the current year is also depicts the same impact. The findings of the study reassure the findings of the previous researchers within the Sri Lankan context, in case of the market value of the firm, while being contrary in case of the share price volatility. Accordingly, the firms' ability of utilizing the dividend policy as a mechanism of controlling the volatility of share prices is established. However, it will not be effective in altering the market value of the firm.
Author: Ala'a Adden Awni Abuhommous
Publisher:
ISBN:
Category :
Languages : en
Pages :
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Book Description
The economic reforms in Jordan during the last two decades have highlighted and promoted the role that non-financial firms play within the Jordanian economy. The ability of firms to play this role is in major part determined by the structure of the financial system in which they operate, and in particular whether this financial system is able to make capital available efficiently to those firms that need it. Whether this is the case can be investigated by analysing the impact of firm characteristics on some of the most important financial decisions taken by these firms, and how these decisions are influenced by the presence of market imperfections. The thesis examines the relation between the financing and investment decisions, where the effect of financial constraints on the firm's investment decision is investigated. In particular, this thesis focuses on how financial constraints affect different firms by investigating the extent to which the reliance on internal cash flow is affected by firm characteristics such as size, age, dividend payout ratio, and market listing. We find that Jordanian firms are financially constrained, but that these constraints do not appear to be related to firm characteristics. Further, results show that Jordanian firms use debt rather than equity to finance their investment. The second empirical chapter focuses on the main determinants of firms' capital structure. Here the results show that Jordanian firms follow the pecking order theory, where profitability and liquidity have a negative impact on the level of debt. Size and market to book value have a positive impact, supporting the view that there are significant constraints on debt financing since indicators of the financial health of the firms affect their capital structure ratio. There is also evidence that ownership structure affects the firm's access to debt. The final empirical chapter examines the impact of firm characteristics on dividend policy, and shows that profitability and market to book value have a positive impact on dividend policy, implying that firms with better access to capital or credit pay dividends. This implies that firms retain earnings in order to ensure that they have sufficient capital to invest, confirming the initial result that Jordanian firms are financially constrained. There is also evidence of the impact of ownership structure, consistent with the predictions of agency cost theory, while institutional investors appear to follow the prudent-man restrictions, being positively associated with firms that pay dividends. This thesis confirms the presence of market imperfections that have a significant influence on the financial decisions taken by Jordanian firms. The consistent evidence of the importance of retained earnings shows that these firms face substantial constraints in terms of their access to external funds, despite the reforms to the Jordanian financial system over the last two decades.
Author: Ghassan Omet
Publisher:
ISBN:
Category :
Languages : en
Pages : 14
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Book Description
The numerous published theoretical and empirical papers have kept dividend policy in its prominent status in the corporate finance literature. Much of the empirical research has been applied on companies listed on advanced stock markets. Employing the panel data methodology, this paper examines the dividend policy behaviour of companies listed on the Jordanian capital market. Based on the time period 1985-1999, it is concluded that Jordanian companies follow stable cash dividend policies. Moreover, the results indicate that the 1996 imposition of a 10 percent tax rate on dividends did not lead to any significant changes in their dividend policies.
Author: Basil Al-Najjar
Publisher:
ISBN:
Category :
Languages : en
Pages :
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Book Description
Dividend policy is one of the important and puzzling issues in corporate finance it is a controversial subject that finance scholars engage in theorizing the tendency of firms for paying dividends or not. This paper investigates dividend policy decisions in developing countries through studying Jordanian non-financial firms. The paper finds that the dividend policy in Jordan as a developing country is influenced by factors similar to those relating to developed countries such as: leverage ratio, institutional ownership, profitability, business risk, asset structure, growth rate, and firm size. Furthermore, the factors affecting the likelihood of paying dividends are similar to those affecting the dividend policy. Finally, the results show that the Lintner model is valid for Jordanian data, and that Jordanian firms have target payout ratios and they adjust to their target relatively faster than those in developed countries.
Author: Basil Al-Najjar
Publisher:
ISBN:
Category :
Languages : en
Pages :
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Book Description
This study investigates the information content of the dividend per share for Jordanian non-financial firms, across the period from 1994 to 2003. The results indicate that the main purpose of dividend policy in Jordan is to signal firms' good performance, and therefore the information of dividend per share can be summarized to one or zero signal. Thus, the study argues that the dividend per share in Jordan can be used as one of the indexes to reflect dividend policy.
Author: Biswajit Kumar
Publisher:
ISBN:
Category :
Languages : en
Pages : 8
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Book Description
The Impact of dividend decision on the share price volatility in the Indian Stock Market is the subject matter of this study. Using the correlation analysis and the least square multiple regression methods, the study found only 32% of the changes in the share prices are explained by Dividend Yield, Dividend Payout Ratio, Investment growth, Size of the Firm, Leverage, and Earnings Volatility.
Author: Ayman E. Haddad
Publisher:
ISBN:
Category :
Languages : en
Pages : 17
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Book Description
This study examined the inter-temporal Dividend-Per-Share (DPS) behaviour. The estimated partial-adjustment-models included Lintner's (1956), Darling's (1957) and Brittain's (1966) models. The results reported from the partial-adjustment-models indicated that Lintner's model was the best-fit model for Jordanian firms. Previous dividends and current earnings had the most influence on the DPS inter-temporal behaviour, indicating that Jordanian firms follow a persistent dividend policy. While dividends are persistent, Jordanian firms smooth dividends less than their counterparts in developed markets.
Author: Luis Correia da Silva
Publisher: OUP Oxford
ISBN: 0191531812
Category : Business & Economics
Languages : en
Pages : 204
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Book Description
Dividends are not only a signal about a firm's prospects under asymmetric information, but they can also act as a corporate governance device to align the management's interests with those of the shareholders. Dividend Policy and Corporate Governance is the first comprehensive volume on the relationship between dividend policy and corporate governance, and examines in detail empirical studies and current theories. Reviewing the interactions between dividend policy and other corporate governance mechanisms, it compares results for the UK and the US with those for other countries such as France, Germany, and Japan, and provides new empirical evidence on corporate governance in continental Europe and its impact on dividends. Focusing on one of the main representatives of this system, Germany, it highlights major differences between the dividend policies of German firms and those of UK or US firms. Conventional wisdom states that German dividends are lower than UK or US dividends, yet on a published-profits basis the exact converse is true. In addition, the authors demonstrate a link between corporate control structures and dividend payouts, report evidence that the existence of a loss is an additional determinant of dividend changes, and demonstrate that the tax status of the controlling shareholder and the firm's dividend payout are not linked. The conclusions reached in this book have important implications for the current debate on corporate governance, making it invaluable for academics, finance professionals, regulators, and legal advisors.
