The Effect of Dividend Policy on Stock Price: Evidence from An Emerging Country

Abstract

This study attempts to explore the effect of dividend policy on the stock prices of the companies in Turkey. A balanced panel data set has been formed with 102 companies listed on Borsa Istanbul Industrial Index (XUSIN) for the period 2004-2016. The results of the models used in the study show no statistically significant effect of gross dividend payout ratio, cash dividend payout ratio and their one-year lagged values on stock prices. 1187 dividend policy that will maximize the firm value and will not have any negative effect on the future investment goals and the cash flow of the firm. For this reason, the way that the investors react to dividend distribution is crucial for the managers.Various theories have been put forward regarding the correlation between dividend yields and capital gains as well as the effect of dividend distribution on investor preferences. These theories are fundamentally divided into two main views. The first view holds that the dividend distribution is relevant, while the second view holds that it is not. Miller and Modigliani (1961) were the first to argue in their "Dividend Irrelevance Theory" that dividend policy does not affect the firm value. The Residual Dividend and Clientele Effect theories also suggest that dividend policies do not have an effect on the firm value. On the other hand, as a counterpoint to the dividend irrelevance theory, Bird in Hand theory (Lintner, 1962) constitutes the main theory of dividend relevance, with other theories such as Walter Model (1963), Signalling Theory (Bhattacharya, 1979), Tax Preference Theory (Litzenberger and Ramaswamy, 1979) and the Agency Theory (Rozeff, 1982) supporting it.Although there have been various studies conducted in the finance literature regarding the validity of both theories, no final result has been reached so far. In this studies that have been conducted, the results differ depending on the country that the business is located in, the sector of the business, the period of activity, the investor profile and the conjuncture. These results indicate that Fischer Black's statement (Black, 1976) "The harder we look at the dividend picture, the more it seems like a puzzle, with pieces that just don't fit together" is still valid.As a result of the firm value standing out as the ultimate goal of the companies, the study of the factors which affect the firm value still maintains its importance. In this study, we take stock price as an indicator of the firm value while we analyze the relations between firm value and dividend policy in the Turkish Capital Market.The structure of this paper is as follows: the introduction, the literature review, description of the data and the empirical methodology, findings of the econometric analysis, and the conclusion. Literature ReviewMany studies have been conducted in the past attempting to explain the relationship between dividend policy and stock prices. There are various studies which support that the dividend earnings have an effect on stock prices.The first study was introduced by M.J. G...

Efeito da estrutura de propriedade na relação entre assimetria de informação e política de pagamentos

“…Empresas com maior grau de liquidez pagam menos dividendos (Ferreira Jr et al, 2010;Lin et al, 2017). Desse modo, infere-se que empresas mais líquidas podem estabelecer uma melhor política de dividendos que maximize o valor da empresa sem gerar efeito negativo nas metas futuras de investimento e no fluxo de caixa da empresa (Topak & Dereli, 2018), não sendo, portanto, pressionadas a pagar dividendos para evitar declínio no preço das ações. Outrossim, a liquidez da empresa tem relação negativa com a diferença entre o pagamento de dividendos sobre ação e o pagamento de JSCP sobre o preço ação.…”

“…Ela permite às companhias transferir parte do fluxo de caixa gerado por seus negócios aos investidores e acionistas (Kumar & Vergara-Alert, 2018). No entanto, a remuneração aos acionistas, de parte dos lucros obtidos, pode prejudicar o fluxo de caixa e as possibilidades de investimento da empresa (Topak & Dereli, 2018).…”

“…A política de dividendos é um sinal que pode mudar as percepções dos investidores em relação às perspectivas de ganhos futuros da empresa (Ben-Nasr, 2015). Dessa forma, os gestores, muitas vezes relutantes em cortar dividendos para evitar declínio nos preços das ações (Rajverma et al, 2019), tentam estabelecer uma política ótima de dividendos que maximize o valor da empresa para não gerar efeito negativo nas metas futuras de investimento e no fluxo de caixa da empresa (Topak & Dereli, 2018).…”

Pengaruh Profitabilitas, Likuiditas Dan Kebijakan Dividen Terhadap Nilai Perusahaan Sektor Industri Barang Konsumsi Di Bei

“…Hal yang sama didapatkan dari penelitian yang dilakukan oleh (Ayem & Nugroho, 2016), (Adesina et al, 2017). Berbeda dari hasil penelitian yang di dapatkan (Topak & Dereli, 2018) yang menunjukkan bahwa kebijakan dividen tidak berpengaruh signifikan terhadap nilai perusahaan.…”

“…Menurut (Suwardika & Mustanda, 2017) hal yang lebih diperhatikan oleh investor adalah kinerja perushaan dan rasio-rasio keuangan yang terdapat pada laporan keuangan perusahaan serta nama baik perusahaan sebelum memutuskan untuk berinvestasi. Hasil ini sejalan dengan penelitian yang dilakukan oleh (Melinda Yanti Putu Diah, 2019), (Apriliyanti et al, 2019), (Topak & Dereli, 2018), (Martha et al, 2018) yang mendapatkan hasil bahwa kebijakan dividen berpengaruh negatif dan tidak signifikan terhadap nilai perusahaan.…”