Impact of Dividend Policy on Stock Prices for Nifty 100 Index in NSE India
BHALLA, AKASH (2023)
2023
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Julkaisun pysyvä osoite on
https://urn.fi/URN:NBN:fi:amk-2023060220813
https://urn.fi/URN:NBN:fi:amk-2023060220813
Tiivistelmä
The aim of this thesis is to investigate how dividend policy affects share price volatility on the National Stock Exchange (NSE) for NIFTY 100 index companies. A selection of 100 NSE listed companies in India are investigated across a five-year period, from 2018 to 2022, utilizing panel data analysis. The analysis is extended to include different sectors constituting the NIFTY 100 index.
After accounting for business size and financial leverage as control variables, the study's explanatory variables—dividend pay-out, dividend yield, and dividend per shar were used to analyze the firms' dividend policies. EViews software was used for analyzing the panel data along with correlation and scatter plot tests. A multivariable regression model was used as the statistical model, and the requisite tests were used to test the composite data (panel). Before analyzing the data, Unit root test, Chaw test and Hausman test for stationary tests of the variables, select panel data in pooling data and the fixed effects model was chosen.
The findings were in line with the dividend irrelevance theory, i.e., at an Index level no association was observed between the dividend policies and the stock price volatility. At the sector level the dividend irrelevance stood true for the Automobile, healthcare, and the NIFTY 100 index with financial companies.
However, for FMCG, Financial services and Information technology sectors there were few negative significant relationships between the dividend policies and stock price volatility. The relationship betweendividend policy measures and share price volatility has been illuminated by this idea. Anyone who wants to learn more about the subject will find the findings from this research very useful. People will be able tobetter appreciate the relevance of different dividend policies and their impact, as there is no correlation between dividend policy measures and stock price volatility.
After accounting for business size and financial leverage as control variables, the study's explanatory variables—dividend pay-out, dividend yield, and dividend per shar were used to analyze the firms' dividend policies. EViews software was used for analyzing the panel data along with correlation and scatter plot tests. A multivariable regression model was used as the statistical model, and the requisite tests were used to test the composite data (panel). Before analyzing the data, Unit root test, Chaw test and Hausman test for stationary tests of the variables, select panel data in pooling data and the fixed effects model was chosen.
The findings were in line with the dividend irrelevance theory, i.e., at an Index level no association was observed between the dividend policies and the stock price volatility. At the sector level the dividend irrelevance stood true for the Automobile, healthcare, and the NIFTY 100 index with financial companies.
However, for FMCG, Financial services and Information technology sectors there were few negative significant relationships between the dividend policies and stock price volatility. The relationship betweendividend policy measures and share price volatility has been illuminated by this idea. Anyone who wants to learn more about the subject will find the findings from this research very useful. People will be able tobetter appreciate the relevance of different dividend policies and their impact, as there is no correlation between dividend policy measures and stock price volatility.