The Impact of Dividend Policy on Stock Price: An Empirical Evidence from Hotels and Travels Companies Listed in Colombo Stock Exchange
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Date
2016
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Department of Accountancy, Faculty of Commerce and Management Studies, University of Kelaniya, Sri Lanka
Abstract
Dividend Policy is one of the important factors that affect the stock price.
Dividend policy is measured by dividend per share, dividend yield and
dividend payout ratio. The purpose of this paper is to identify the impact of
dividend policy on stock price in the hotels and travels sector companies listed
in the Colombo Stock Exchange. Thirty-four companies listed in the hotels
and travels sector were analyzed for a period of five years from the year 2012
to 2016. Data were collected from the annual reports of the companies.
Statistical Package (SPSS 19.0) was applied to analyze and evaluate the
collected data. Correlation analyses and multiple regression are used to
explore the association between study variables. A positive impact is found
between dividend per share, dividend presence in a firm with stock price
changes, while a negative impact between dividend yield and stock price
changes is also identified. The impact of dividend pay-out ratio deemed to be
insignificant. In addition, it is shown that assets growth rate and firm size
explain stock price changes. The study supports the fact that dividend policy
is relevant in determining the stock price for the hotels and travels sector
companies listed in the Colombo Stock Exchange.
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Keywords
Dividend policy, Stock price, Dividend per share, Dividend yield, Dividend payout ratio
Citation
Hettiarachchi, U.S.J. and Rajeshwaran, N. 2016. The Impact of Dividend Policy on Stock Price: An Empirical Evidence from Hotels and Travels Companies Listed in Colombo Stock Exchange. In Proceedings of the 2nd International Conference in Accounting Researchers and Educators (ICARE 2016), 11th January 2017. Department of Accountancy, Faculty of Commerce and Management Studies, University of Kelaniya, Sri Lanka.