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Dividend policy and share price volatility: evidence from Nepalese commercial banks / Rakhi Jha
Title : Dividend policy and share price volatility: evidence from Nepalese commercial banks Material Type: printed text Authors: Rakhi Jha, Author Publication Date: 2014 Pagination: 80p. Size: GRP/Thesis Accompanying material: 2/B General note: Including Bibliography Languages : English Descriptors: Banks and banking
Dividend policy
Dividends
Share-PriceKeywords: 'dividend policy share price volatility banking dividends share' Class number: 650 Abstract: The study on dividend policy and share price volatility: evidence from Nepalese commercial banks provides an important insight into the understanding of share price behavior in Nepal stock market. This study basically aimed at examining the volatility in share price with respect to banks specific variables and also attempted to evaluate
the causal relationship between dividend policy and share price volatility in Nepalese
stock market. The main purpose of this study is to know relationship between share
price volatility and dividend yield, dividend payout, capital, earnings, asset quality,
net interest margin, investment, size, debt, return on equity and return on assets.
However, the specific objectives of the study are: (a) to analyze whether the current
dividend policy should be maintained or changed, (b) to examine the investor‟s
preference towards dividend payment, (c) to analyze the uniformity with regards to
behaviors in dividend distribution of Nepalese Commercial banks, (d) to analyze the
relationship between dividend and market price of share, (e) to identify the
relationship between price volatility and financial performance of Nepalese
commercial banks, (f) to examine the effects of bank specific variables on price
volatility. The proposed study could be used by researchers, policy makers, and
mangers to examine and understand share price volatility and dividend policy in
Nepalese context.
The sample was selected through purposive sampling method. A structured, self
administered questionnaire was used to collect data from the respondents. Descriptive
statistics including frequencies, percentages, mean and standard deviation were used
to describe variable characteristics while inferential statistics (correlation and
regression) were used to determine and explain variable relationships. The multiple
regression models are used to check the relationship between dependent and
independent variables. This study employs panel data techniques to measure the
relation between price volatility with dividend yield, dividend payout, capital, size,
net interest margin, investment, debt, return on assets, return on equity and earnings
volatility for a sample of 20 commercial banks for the period of 2007-2011. For this
we are selecting 20 commercial banks of Nepal containing 100 observations.
VIII
The study results showed that price volatility is positively correlated with dividend
payout, size of the firm, investment, return on assets and return on equity whereas,
negatively correlated with dividend yield, capital, net interest margin, and debt and
earnings volatility. The coefficient of dividend yield and size is positive with price
volatility. The coefficient of dividend payout, capital, net interest margin, investment,
debt, return on assets, and return on equity and earnings volatility is negative with
price volatility. Further this study found that stable dividend policies should be
followed by the commercial banks. If the company has no cash to pay dividends then
company should pay stock dividends. Hence, current trading price of shares in the
market is moderate. Lack of buying and selling behavior of investors is responsible
for the lack of development of Nepalese stock market. On the basis of earnings
dividend declaring firms have more shareholders and their share value is high. On the
basis of financial performance firm should not pay dividends if profitable
investments. Stable dividend at present level is recommended for Nepalese
commercial banks. Share prices are more volatile (volatile: ups and downs) than
expected dividends.
In sum up, the major findings of this study can add value to the existing literature. It
may help decision makers at bank to focus on major banking activities that may
increase the stock price or may decrease the stock price volatility with other
competitive banks. This may also help management of commercial bank in creating
appropriate strategies for attaining the least share price volatility in Nepalese stock
market.Dividend policy and share price volatility: evidence from Nepalese commercial banks [printed text] / Rakhi Jha, Author . - 2014 . - 80p. ; GRP/Thesis + 2/B.
Including Bibliography
Languages : English
Descriptors: Banks and banking
Dividend policy
Dividends
Share-PriceKeywords: 'dividend policy share price volatility banking dividends share' Class number: 650 Abstract: The study on dividend policy and share price volatility: evidence from Nepalese commercial banks provides an important insight into the understanding of share price behavior in Nepal stock market. This study basically aimed at examining the volatility in share price with respect to banks specific variables and also attempted to evaluate
the causal relationship between dividend policy and share price volatility in Nepalese
stock market. The main purpose of this study is to know relationship between share
price volatility and dividend yield, dividend payout, capital, earnings, asset quality,
net interest margin, investment, size, debt, return on equity and return on assets.
However, the specific objectives of the study are: (a) to analyze whether the current
dividend policy should be maintained or changed, (b) to examine the investor‟s
preference towards dividend payment, (c) to analyze the uniformity with regards to
behaviors in dividend distribution of Nepalese Commercial banks, (d) to analyze the
relationship between dividend and market price of share, (e) to identify the
relationship between price volatility and financial performance of Nepalese
commercial banks, (f) to examine the effects of bank specific variables on price
volatility. The proposed study could be used by researchers, policy makers, and
mangers to examine and understand share price volatility and dividend policy in
Nepalese context.
The sample was selected through purposive sampling method. A structured, self
administered questionnaire was used to collect data from the respondents. Descriptive
statistics including frequencies, percentages, mean and standard deviation were used
to describe variable characteristics while inferential statistics (correlation and
regression) were used to determine and explain variable relationships. The multiple
regression models are used to check the relationship between dependent and
independent variables. This study employs panel data techniques to measure the
relation between price volatility with dividend yield, dividend payout, capital, size,
net interest margin, investment, debt, return on assets, return on equity and earnings
volatility for a sample of 20 commercial banks for the period of 2007-2011. For this
we are selecting 20 commercial banks of Nepal containing 100 observations.
VIII
The study results showed that price volatility is positively correlated with dividend
payout, size of the firm, investment, return on assets and return on equity whereas,
negatively correlated with dividend yield, capital, net interest margin, and debt and
earnings volatility. The coefficient of dividend yield and size is positive with price
volatility. The coefficient of dividend payout, capital, net interest margin, investment,
debt, return on assets, and return on equity and earnings volatility is negative with
price volatility. Further this study found that stable dividend policies should be
followed by the commercial banks. If the company has no cash to pay dividends then
company should pay stock dividends. Hence, current trading price of shares in the
market is moderate. Lack of buying and selling behavior of investors is responsible
for the lack of development of Nepalese stock market. On the basis of earnings
dividend declaring firms have more shareholders and their share value is high. On the
basis of financial performance firm should not pay dividends if profitable
investments. Stable dividend at present level is recommended for Nepalese
commercial banks. Share prices are more volatile (volatile: ups and downs) than
expected dividends.
In sum up, the major findings of this study can add value to the existing literature. It
may help decision makers at bank to focus on major banking activities that may
increase the stock price or may decrease the stock price volatility with other
competitive banks. This may also help management of commercial bank in creating
appropriate strategies for attaining the least share price volatility in Nepalese stock
market.Hold
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Barcode Call number Media type Location Section Status 29/D 332.1 JHA Thesis/Dissertation Uniglobe Library Social Sciences Available Dividend policy and its impact on share price: a study on Nepalese commercial banks / Ankur Shrestha
Title : Dividend policy and its impact on share price: a study on Nepalese commercial banks Material Type: printed text Authors: Ankur Shrestha, Author Publication Date: 2015 Pagination: 91p. Size: GRP/Thesis Accompanying material: 4/B General note: Including bibilography Languages : English Descriptors: Banks
Banks and banking
Commercial banks
Dividend policy
Dividends
Share_PriceKeywords: 'dividend policy share price volatility banking dividends share' Class number: 332.1 Abstract: Dividend policy is a major financing decision that involves with the payment to shareholders in return of their investment. Every firm operating in a given industry follows some sort of dividend payment pattern or dividend policy and obviously it is a
financial indicator of the firm. Demand of the firm's share should to some extent, dependent on the firm's dividend policy. Dividend policy is one of the most widely researched topics in the field of finance but the question is whether dividend policy affects stock prices still remain debatable among managers, policy makers and researchers for many years. Dividend policy is important for investors, managers, lenders and for other stakeholders. It is important for investors because investors consider dividends not only the source of income but also a way to assess the firms from investment points of view.
Selecting a suitable dividend policy is an important decision for the bank because flexibility to invest in future projects depends on the amount of dividends that they pay to their shareholders. If company pay more dividends then fewer funds are available for investment in future projects. Lenders are also interested in the amount of dividend that a company declares, as more amounts is paid as dividend means less amount would be available to the company to pay off their obligation. This study attempts to investigate the impact of dividend policy on market price of the share of the commercial banks listed in the Nepal stock exchange.
This study is based on both primary and secondary sources of data. The primary data have been obtained by conducting questionnaire survey with investors. The secondary data have been collected from the supervision report of Nepal Rastra Bank, annual reports of commercial banks, different published articles, reports and books. Descriptive research design and causal comparative research design has been used to deal with issues associated with the dividend policy and share price. This study is based on pooled cross-sectional analysis of secondary data of 17 commercial banks with 102 observation for the period of 2008 to 2013. Market price of share and share price volatility are selected as the dependent variables for this study. Earnings per share, retained ratio, dividend payout ratio and dividend yield ratio are the explanatory variables. Return on equity, profit after tax, liquidity, growth of total assets, size of total assets and leverage are used as the control variables. The multiple regression models are applied to test the significance and impact of dividend policy on market price of the shares listed in the Nepal stock exchange.
The primary survey revealed that Nepalese commercial banks are paying dividend as per the desire of shareholders. But most of the respondents are not satisfied with the dividend payment by commercial banks. The majority of the respondents agree that dividend paying stocks offer more certainty about the company's future earnings prospects compared to stocks that do not pay dividends. The results of the survey revealed that the majority of the respondents prefer high dividend payout. Most of the respondents blamed government's investment policy for lack of development of Nepalese stock market. The primary survey also found that major reason for the respondent's investment in shares is the expectation of increased in market price. The survey revealed that most of the respondents agree that dividend payments are better signals of confidential information than other media forms; thus raising share value and payment of dividends is a demonstration that the firm is strong enough and can pass up profitable investments.
The study concluded that market price of the share is negatively related with retained ratio and liquidity. There is a positive relation of market price of the share with earnings per share, return on equity and profit after tax. The result shows that higher the earnings per share, higher would be the market price of the share. The result also indicates that lower the retained earnings, higher would be the market price of the share and lower the liquidity, higher would be the market price of the share.
The share price volatility is negatively related with dividend yield ratio and size of total assets. There is a positive relation of share price volatility with dividend payout ratio, leverage and growth of total assets. The result shows that lower the dividend payout ratio, lower would be the volatility of the share price and also lower the growth of total assets, lower would be the volatility of the share price.
Dividend policy and its impact on share price: a study on Nepalese commercial banks [printed text] / Ankur Shrestha, Author . - 2015 . - 91p. ; GRP/Thesis + 4/B.
Including bibilography
Languages : English
Descriptors: Banks
Banks and banking
Commercial banks
Dividend policy
Dividends
Share_PriceKeywords: 'dividend policy share price volatility banking dividends share' Class number: 332.1 Abstract: Dividend policy is a major financing decision that involves with the payment to shareholders in return of their investment. Every firm operating in a given industry follows some sort of dividend payment pattern or dividend policy and obviously it is a
financial indicator of the firm. Demand of the firm's share should to some extent, dependent on the firm's dividend policy. Dividend policy is one of the most widely researched topics in the field of finance but the question is whether dividend policy affects stock prices still remain debatable among managers, policy makers and researchers for many years. Dividend policy is important for investors, managers, lenders and for other stakeholders. It is important for investors because investors consider dividends not only the source of income but also a way to assess the firms from investment points of view.
Selecting a suitable dividend policy is an important decision for the bank because flexibility to invest in future projects depends on the amount of dividends that they pay to their shareholders. If company pay more dividends then fewer funds are available for investment in future projects. Lenders are also interested in the amount of dividend that a company declares, as more amounts is paid as dividend means less amount would be available to the company to pay off their obligation. This study attempts to investigate the impact of dividend policy on market price of the share of the commercial banks listed in the Nepal stock exchange.
This study is based on both primary and secondary sources of data. The primary data have been obtained by conducting questionnaire survey with investors. The secondary data have been collected from the supervision report of Nepal Rastra Bank, annual reports of commercial banks, different published articles, reports and books. Descriptive research design and causal comparative research design has been used to deal with issues associated with the dividend policy and share price. This study is based on pooled cross-sectional analysis of secondary data of 17 commercial banks with 102 observation for the period of 2008 to 2013. Market price of share and share price volatility are selected as the dependent variables for this study. Earnings per share, retained ratio, dividend payout ratio and dividend yield ratio are the explanatory variables. Return on equity, profit after tax, liquidity, growth of total assets, size of total assets and leverage are used as the control variables. The multiple regression models are applied to test the significance and impact of dividend policy on market price of the shares listed in the Nepal stock exchange.
The primary survey revealed that Nepalese commercial banks are paying dividend as per the desire of shareholders. But most of the respondents are not satisfied with the dividend payment by commercial banks. The majority of the respondents agree that dividend paying stocks offer more certainty about the company's future earnings prospects compared to stocks that do not pay dividends. The results of the survey revealed that the majority of the respondents prefer high dividend payout. Most of the respondents blamed government's investment policy for lack of development of Nepalese stock market. The primary survey also found that major reason for the respondent's investment in shares is the expectation of increased in market price. The survey revealed that most of the respondents agree that dividend payments are better signals of confidential information than other media forms; thus raising share value and payment of dividends is a demonstration that the firm is strong enough and can pass up profitable investments.
The study concluded that market price of the share is negatively related with retained ratio and liquidity. There is a positive relation of market price of the share with earnings per share, return on equity and profit after tax. The result shows that higher the earnings per share, higher would be the market price of the share. The result also indicates that lower the retained earnings, higher would be the market price of the share and lower the liquidity, higher would be the market price of the share.
The share price volatility is negatively related with dividend yield ratio and size of total assets. There is a positive relation of share price volatility with dividend payout ratio, leverage and growth of total assets. The result shows that lower the dividend payout ratio, lower would be the volatility of the share price and also lower the growth of total assets, lower would be the volatility of the share price.
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Barcode Call number Media type Location Section Status 95/D 332.1 SHR Thesis/Dissertation Uniglobe Library Social Sciences Available