The Impact of Dividend Policy on the Volatility of Share Price of Manufacturing Companies in Malaysia
Bhagmal Harsha Neelanjana1, Hafinaz Hasniyanti Hassan2
1Bhagmal Harsha Neelanjana, Asia Pacific University of Technology and Innovation, School of Accounting, Finance and Quantitative Studies, Faculty of Business Management, Technology Park Malaysia, Bukit Jalil, Kuala Lumpur, Malaysia.
2Hafinaz Hasniyanti Hassan, Asia Pacific University of Technology and Innovation, School of Accounting, Finance and Quantitative Studies, Faculty of Business Management, Technology Park Malaysia, Bukit Jalil, Kuala Lumpur, Malaysia.
Manuscript received on 05 February 2019 | Revised Manuscript received on 11 February 2019 | Manuscript Published on 19 February 2019 | PP: 212-224 | Volume-7 Issue-5S January 2019 | Retrieval Number: ES2148017519/19©BEIESP
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© The Authors. Blue Eyes Intelligence Engineering and Sciences Publication (BEIESP). This is an open access article under the CC-BY-NC-ND license (http://creativecommons.org/licenses/by-nc-nd/4.0/)
Abstract: The objective of this research is to investigate the relationship between dividend policy and share price volatility of manufacturing companies in Malaysia. For this purpose, A sample of 35 dividend and non-dividend paying listed companies in the Malaysian Stock Exchange is taken from the food, beverages, chemical, home product and consumer product manufacturing sector for the time period starting 2008 to 2017. Dividend payout, dividend yield are the main independent variables while firm size and earnings volatility are the control variables that are tested against the volatility of share price in this study. The Pearson Correlation Analysis and Multiple Linear Regression are used for analysis to examine the relationship between the independent variables and share price volatility. Financial data was collected from annual reports of the companies listed in Bursa Malaysia. Results showed that dividend payout, firm size and earning volatility had a significant negative relationship with share price volatility while dividend was found to be insignificant to share price volatility.
Keywords: Dividend Policy, Share Price, Volatility, Manufacturing Company.
Scope of the Article: Advanced Manufacturing Technologies