The Influence of Dividend Policy on Share Price Volatility of the Companies Listed in Tehran Stock Exchange

Document Type : Original Article

Authors

1 Emeritus Professor of Accounting, Shahid Chamran University of Ahvaz, and Professor of Accounting, Science and Research Branch, Islamic Azad University of Isfahan, Isfahan, Iran

2 M.A. in Accounting, Mobarakeh Branch, Islamic Azad University, Mobarakeh, Iran

3 M.A. in Accounting, Bonab Branch, Islamic Azad University, Bonab, Iran

Abstract

One of the way to increase shareholder wealth is raising the stock price of a company. The identification of effective factors in increasing of company stock price is always important for financial managers to control company stock price, and for investors who purchase company stock price in order to earn profit from increasing company stock price. The hypothesis testing is done by pooling data and regression models based on a sample of 58 firms that are accepted in Tehran Stock Exchange between 2002 and 2011. The research discusses in identification of how one of the weighty factors affects stock price fluctuation (i.e dividend policy). F Leamer test is used to assess type of data and also T-Student test is used to assess the variables and Hausman test is used to assess fixed the or random effect. The research results showed that there is a significant relationship between share price volatility and dividend yield and payout ratio. Over all, it could be clearly seen that there is a significant relationship between dividend policy and share price volatility.

Keywords

Journal of Iranian Accounting Review
Volume 3, Issue 11
September 2016
Pages 65-76

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