Dividend Policy and Stock Price: The Case Study of Thailand Stock Exchange

Apichat Pongsupatt () and Tharinee Pongsupatt ()
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Apichat Pongsupatt: Faculty of Business Administration, Kasetsart University
Tharinee Pongsupatt: Faculty of Business Administration, Kasetsart University

No 16217365, Proceedings of Economics and Finance Conferences from International Institute of Social and Economic Sciences

Abstract: The objective of this study is to investigate the effect of dividend policy towards stock price of companies listed in Thailand Stock Exchange. From existing literature reviews, we select dividend yield and retention rate as explanatory variables for explaining dividend policy. While earning per share, return on equity and net profit are assigned as controllable variables. Stock price is used as an independent variable. This study uses secondary data collected from annual financial statements of all listed companies in Thailand Stock Exchange except financial sector for the period of 10 years starting from 2016 to 2025. After examining the data, only 3502 samples are qualified under the criteria. The multiple regression model is implemented for statistical testing at the significant level 0.05. By that time, the results found a negative effect of dividend yield and retention rate on stock price. While earning per share and return on equity have positive relationship on stock price. Net profit is the only variable that has no effect on the stock price. This model is supported by R2 of 0.661. We also observe that Thai companies can increase their firm value by enhance earnings per share or enlarge their return on equity. Conversely, when dividend yield represents annual dividend over market price and retention rate increases, the share price decreases. These events can be explained by bird-in-the-hand theory. Investors who are risk-averse would rather have certain dividend today than an uncertain capital gain in the future. The findings in this study can assist investors to comprehend the effect of specific determinants regarding stock price in Thailand.

Keywords: Dividend Yield; Retention Rate; Return on Equity; Earning per Share; Stock Price: Thailand Stock Exchange (search for similar items in EconPapers)
JEL-codes: G02 G35 G39 (search for similar items in EconPapers)
Pages: 10 pages
New Economics Papers: this item is included in nep-sea
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Published in Proceedings of the Proceedings of the International Conference on Economics, Finance & Business, Vienna, Nov -0001, pages 67-76

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