For many financial analysts the relationship between dividend policy and share price
volatility remains inconclusive. The purpose of this study was to ascertain whether
the relationship between dividend policy and share price volatility for JSE-listed firms
in South Africa differs from previous, similar research done on different markets. The
research study answered the research question and determined what the relationship
is between dividend policy and share price volatility for a representative sample of
JSE-listed firms. In addition, it met the objective of finding and evaluating the
relationship between dividend policy and share price volatility for a selection of JSElisted
firms, under various economic conditions. The research study spanned a 12-
year period with more than 1 065 observations noted. Quantitative, secondary data
was collected and descriptive statistics were used during the analysis phase. Two
standard multiple regression models were used to regress dividend policy and share
price volatility, with the first regression model only providing a crude test between the
variables. The second regression model accounted for factors that affect both
variables and was included to provide a more accurate test estimation. The
relationship between the dividend payout ratio and share price volatility and the
relationship between dividend yield and share price volatility were evaluated and
reported on, under various different economic conditions (pre, during and post the
2008 financial crisis). The study concluded that there is a negative correlation
between a firm’s dividend policy and share price volatility. It further found that a firm’s
dividend payout ratio, and not the dividend yield ratio, remains the single biggest
contributor in explaining the variance in share price volatility throughout the different
economic phases presented by pre, during and post the 2008 global financial crisis. / Finance, Risk Management and Banking / M. Com. (Financial Management)
| Identifer | oai:union.ndltd.org:netd.ac.za/oai:union.ndltd.org:unisa/oai:uir.unisa.ac.za:10500/26739 |
| Date | 10 1900 |
| Creators | Wehncke, Francois Cornelius |
| Contributors | Kotze, P. N., Tsaurai, Kunofiwa |
| Source Sets | South African National ETD Portal |
| Language | English |
| Detected Language | English |
| Type | Dissertation |
| Format | 1 online resource (x, 125 leaves) : illustrations, application/pdf |
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