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Appears in Collections:Accounting and Finance Journal Articles
Peer Review Status: Refereed
Title: Dividend policy and share price volatility: UK evidence
Authors: Hussainey, Khaled
Mgbame, Chijoke Oscar
Chijoke-Mgbame, Aruoriwo M
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Keywords: Business policy
Share prices
United Kingdom
Issue Date: 2011
Publisher: Emerald Group Publishing
Citation: Hussainey K, Mgbame CO & Chijoke-Mgbame AM (2011) Dividend policy and share price volatility: UK evidence, Journal of Risk Finance, 12 (1), pp. 57-68.
Abstract: Purpose– The purpose of this paper is to examine the relation between dividend policy and share price changes in the UK stock market. Design/methodology/approach– Multiple regression analyses are used to explore the association between share price changes and both dividend yield and dividend payout ratio. Findings– A positive relation is found between dividend yield and stock price changes, and a negative relation between dividend payout ratio and stock price changes. In addition, it is shown that a firm's growth rate, debt level, size and earnings explain stock price changes. Practical implications– The paper supports the fact that dividend policy is relevant in determining share price changes for a sample of firms listed in the London Stock Exchange. Originality/value– To the best of the authors' knowledge, this paper is the first to show that corporate dividend policy is a key driver of stock price changes in the UK.
Type: Journal Article
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Rights: Publisher policy allows this work to be made available in this repository. Published in Journal of Risk Finance, The, Vol. 12 Iss: 1, pp.57 - 68 by Emerald Group Publishing. The original publication is available at
Affiliation: Accounting and Finance
University of Benin
University of Stirling

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