Dividend Policy and the Stock Market Reaction to Dividend Announcements in Pakistan PDF Download

Author: Naimat Ullah Khan
Publisher:
ISBN:
Category :
Languages : en
Pages :

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Author: Muhammad Mubarak
Publisher:
ISBN:
Category :
Languages : en
Pages :

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In Pakistan corporate sector is adversely facing competition due to economic downturn in the world and making efforts to survive in a competitive and uncertain economic environment. This study will help to improve dividend decisions of corporate sector through proper implementation of their dividend policies. This paper is an attempt to explain the effect of dividend announcements on stock prices of chemical and pharmaceutical industry of Pakistan. A sample of twenty five companies listed at KSE-100 Index is taken from the period of 2001-2010.Results of this study are based on Fixed and Random Effect Model which is applied on Panel data to explain the relationship between dividends and stock prices after controlling the variables like Earnings per Share, Retention Ratio and Return on Equity. Results indicate that Cash Dividend, Retention Ratio and Return on Equity has significant positive relation with stock market prices and significantly explains the variations in the stock prices of chemical and pharmaceutical sector of Pakistan while Earnings per Share and Stock Dividends have negative insignificant relation with stock prices. This paper further shows that Dividend Irrelevance Theory is not applicable in case chemical and pharmaceutical industry of Pakistan.

Author: Ghulam Chaudhary
Publisher:
ISBN:
Category :
Languages : en
Pages : 8

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This study is aimed at investigating the signaling effect of cash dividend announcements by employing the standard event methodology over the companies listed on Karachi Stock Exchange. The companies are randomly selected from different sectors that have announced cash dividends during calendar year 2010 and total 30 companies are included in the study. The standard event methodology is applied to explore the impact of cash dividend announcements upon stock returns and an event window of 15 days with dividend announcement date as the event day is constructed. The results show that the average abnormal returns (AARs), by and large, remained positive and statistically significant in post-event window days. The results of study tend to support dividend signaling hypothesis indicating that the dividend announcement may be used as a tool to generate positive signals in the market.

Author: David E. Allen
Publisher:
ISBN: 9781863422581
Category : Dividends
Languages : en
Pages : 36

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Author: Agnieszka Perepeczo
Publisher:
ISBN:
Category :
Languages : en
Pages : 14

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The effects of the decisions concerning the distribution of profits on market value of a company have been addressed by numerous empirical studies. At the beginning of the paper the author presents the main assumptions of complex and usually contradictory dividend policy theories as well as the clientele effect and the signalling effect strictly related to the dividend policy. Next, an overview is provided of studies analysing how shareholders respond to changes in the dividend policy, which represents the market evaluation of the event's impact on the company's value in developed markets. In order to identify similarities among the reactions of various shareholders and the impact of the decisions related to dividend policies in the Polish capital market on the market value, a statistical analysis of the scale of the distribution of profit has been carried out among companies listed on the Warsaw Stock Exchange and the results are provided along with the results of research into the reaction of shareholders to dividend initiation.

Author: Mohib Ullah
Publisher:
ISBN:
Category :
Languages : en
Pages : 21

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The finance literature reports mixed results about the stock market reaction to dividend announcements. This study has tried to figure out that the heterogeneous stock market reaction to dividend announcements might be attributed to several firm-specific financial and non-financial factors. In this vein, this study investigates the role of family ownership, firm size, leverage, and dividend yield in explaining the stock market reaction to dividend announcements. Using a sample of 206 dividend announcements of 136 firms listed at the Pakistan Stock Exchange over the period of 2008 to 2012, results of both the univariate tests and the regression analysis show stock market reaction to dividend announcements varies significantly across different groups of firms. Specifically, our results show that family ownership, firm size, leverage, and dividend yield play a significant role in affecting the stock market reaction to dividend announcements.

Author: Cynthia Sari Dewi
Publisher:
ISBN:
Category : Dividends
Languages : en
Pages : 91

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Author: Ahmed Imran Hunjra
Publisher:
ISBN:
Category :
Languages : en
Pages : 7

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Purpose: The volatility in stock prices is one of the most discussed topics in finance. Many studies have been conducted to find the factors which cause fluctuation in stock prices and different results have been found. In this study an attempt has been made to see the affect of dividend yield, dividend payout ratio, return on equity, earning per share and profit after tax on stock prices in Pakistan. For this purpose four non financial sectors (Sugar, Chemical, Food and personal care, Energy) have been selected. A sample of 63 companies listed at Karachi stock exchange was analyzed for the period of 2006-2011. Methodology: Ordinary least square regression model has been applied on panel data. Findings: The results indicate dividend yield and dividend payout ratio which are both measures of dividend policy have significant impact on stock price. Dividend yield is negatively related with stock price and dividend payout ratio is positively related with stock price which means that these results are against dividend irrelevance theory. For other independent variables profit after tax and earnings per share have significant positive impact on stock price and return on equity which shows positive insignificant impact on stock price. Recommendations: This paper shows new insights for policy makers to improve the performance of Karachi stock exchange.

Author: Maryam Jamshaid
Publisher: LAP Lambert Academic Publishing
ISBN: 9783659418716
Category :
Languages : en
Pages : 132

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Dividend policy is one of the very important issues of modern corporate finance. It is the most debatable topic which still maintains its prominent place. This book is a worthy contribution towards the existing body of knowledge by providing the evidence about the determinants of dividend policy in the context of the chemical sector in Pakistan. The objective of this research was to examine the determinants that influence the dividend payout policy of the chemical sector companies listed on Karachi Stock Exchange. The estimations have been accomplished using the panel data analysis technique for a sample of 15 companies during 2005 - 2010. EVIEWS 5.0 was used to analyze the data. Random Effect Model and Fixed Effect Model were used to estimate the multiple regression equation. The results of the study revealed that according to Random Effect Method dividend payment decision of chemical sector companies is influenced by cash flow ratio, liquidity (current ratio) and size (log of total assets). On the other hand, according to Fixed Effect Method dividend payment decision of chemical sector companies is influenced by cash flow ratio.

Author: Friday Kennedy Ozo
Publisher:
ISBN:
Category :
Languages : en
Pages :

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