Influence of Dividend Policy on Stock Price Volatility of Non-Financial Firms Listed Nigerian Stock Exchange

Taofeek Agbatogun, Sunday Kajola and Olufemi Akinbola (akinbolaoa@funaab.edu.ng)

Business & Management Compass, 2019, issue 1, 35-49

Abstract: Stock Price Volatility with Dividend Policy pose relevant factors to an investor’s choice in stock investment. The focus of the study was intelligent view on the long-run and short-run causal significance of dividend management on stock price volatility. Panel Auto Regressive Distribution Lag was conducted on listed non-financial firms in Nigeria. The result showed that Stock Price Volatility in the long-run based on a threshold of 1% level of significance is significant as movement of Dividend Payout Ratio, Dividend Yield, Earnings Volatility and Firm Size causes about 0.15%, 0.76%, and 0.008% increase and about 3% decrease respectively on change in stock price on the long run while in the short-run, all the variables except Earnings Volatility have insignificant effect. The study recommended that low dividend payout ratios at a stable rate serve as a good signal out to all investors for expectation of returns which in turn increases firm value and stabilize stock price.

Keywords: Dividend Yield; Dividend payout Ratio; Stock Price Volatility; Earning Volatility; Firm size (search for similar items in EconPapers)
JEL-codes: G35 (search for similar items in EconPapers)
Date: 2019
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