This study intends to observe the impact of dividend per share on stock price of companies listed on Dhaka Stock Exchange. The study uses a firm-level panel data set of 61 companies from eight major sectors of DSE for ten years from 2008 to 2017. Pearson correlation was used to examine the relationship between dividend per share and stock price of each sector under the study and mixed results were found. Simple linear regression was also used to investigate the impact of dividend per share on stock price. The findings of the impact of dividend per share on stock price of companies of eight selected sectors produced very interesting results. The results of simple linear regression show that Banking, Food & Allied Product, Pharmaceuticals & Chemicals and Insurance sectors have significant impact of dividend per share on stock price, which supports the relevance theory of dividend i.e., Walter’s model and Gordon’s model. Furthermore, dividend per share has significant positive impact on stock price of Food & Allied Product and Pharmaceuticals & Chemicals sectors, while in Banking and Insurance sector, dividend per share has significant negative impact on stock price. On the other hand, there is no significant relationship between dividend per share and stock price of Financial Institutions, Engineering, Fuel & Power and Textile sectors, which supports Irrelevance theory of dividend i.e., MM Hypothesis. Thus, the impact of dividend on stock price has still remained a controversial issue. That is, dividend puzzle (Black, 1976) has not yet solved.

This study intends to identify the determinants of corporate dividend policy followed in Bangladesh. The study uses a firm-level panel data set of 61 companies from eight major sectors of DSE for ten years from 2008 to 2017. Pearson correlation coefficient and backward elimination method of multiple regression have been used to find out the results of the study. Pearson correlation coefficient shows mixed results for the relationship between dividend per share and ownership structure, reserve & surplus, net asset value per share, earnings per share, dividend payout ratio and dividend yield. The findings of Backward Elimination Method of Multiple Regression show that ownership structure has positive impact on dividend per share in Financial Institutions sector. Reserve & surplus has positive impact on dividend per share in Banking and Pharmaceuticals & Chemicals sectors, but negative impact in Food & Allied Product sector. Net asset value has positive impact on dividend per share in Food & Allied Product, Textile and Insurance sectors, but negative impact in Banking sector. Earnings per share has positive impact on dividend per share in Engineering sector. Dividend payout ratio has positive impact on dividend per share in Fuel & Power and Insurance sector, but negative impact in Banking sector. Dividend yield has a positive impact on dividend per share in Banking, Financial Institutions, Engineering and Fuel & Power sector. Overall, ownership structure, reserve & surplus, net asset value per share, earnings per share, dividend payout ratio and dividend yield have significant impact on dividend per share of one or more of the selected sectors under study.