Dividend policy and share price volatility: UK evidence

Hussainey, Khaled, Mgbame, C O and Chijoke-Mgbame, A M (2011) Dividend policy and share price volatility: UK evidence. Journal of Risk Finance, 12 (1). pp. 57-68. doi:10.1108/15265941111100076

Full text not available from this repository.


Purpose – The purpose of this paper is to examine the relation between dividend policy and share price changes in the UK stock market. Design/methodology/approach – Multiple regression analyses are used to explore the association between share price changes and both dividend yield and dividend payout ratio. Findings – A positive relation is found between dividend yield and stock price changes, and a negative relation between dividend payout ratio and stock price changes. In addition, it is shown that a firm's growth rate, debt level, size and earnings explain stock price changes. Practical implications – The paper supports the fact that dividend policy is relevant in determining share price changes for a sample of firms listed in the London Stock Exchange. Originality/value – To the best of the authors' knowledge, this paper is the first to show that corporate dividend policy is a key driver of stock price changes in the UK.

Item Type: Article
Article Type: Article
Uncontrolled Keywords: United Kingdom, Dividends, Business policy, Share prices
Subjects: H Social Sciences > HG Finance
H Social Sciences > HG Finance > HG4501 Investment, capital formation, speculation
Divisions: Schools and Research Institutes > School of Business, Computing and Social Sciences
Research Priority Areas: Applied Business & Technology
Depositing User: Ineke Tijsma
Date Deposited: 31 Mar 2015 13:25
Last Modified: 07 Aug 2023 12:59
URI: https://eprints.glos.ac.uk/id/eprint/1561

University Staff: Request a correction | Repository Editors: Update this record

University Of Gloucestershire

Bookmark and Share

Find Us On Social Media:

Social Media Icons Facebook Twitter Google+ YouTube Pinterest Linkedin

Other University Web Sites

University of Gloucestershire, The Park, Cheltenham, Gloucestershire, GL50 2RH. Telephone +44 (0)844 8010001.