Preprint Article Version 1 Preserved in Portico This version is not peer-reviewed

The Impact of the Dividend Policy on the Price Volatilization of Common Stock–Evidence from the Stock Market of Hong Kong

Version 1 : Received: 10 February 2022 / Approved: 28 February 2022 / Online: 28 February 2022 (20:37:37 CET)

How to cite: Kam, W.T. The Impact of the Dividend Policy on the Price Volatilization of Common Stock–Evidence from the Stock Market of Hong Kong. Preprints 2022, 2022020362 (doi: 10.20944/preprints202202.0362.v1). Kam, W.T. The Impact of the Dividend Policy on the Price Volatilization of Common Stock–Evidence from the Stock Market of Hong Kong. Preprints 2022, 2022020362 (doi: 10.20944/preprints202202.0362.v1).

Abstract

This paper intends to examine whether a company’s policy of dividend would impact or influence the price fluctuation of respective common stock in the designated stock market particularly in Hong Kong. Hence, there are 354 companies in Hong Kong which are all listed company on the Stock Exchange of Hong Kong (HKEX), were chosen as sample data for analysis with their audited financial information ranged from 2001 to 2020. Two proxies, the yield and the ratio of pay-out of dividend were widely adopted for the measurement of the effect of dividend policy and the possible influence on the volatility of respective common stock price by employing two statistical models, which are the model of fixed and random effects to provide accurate regression coefficients. With the results from the model of fixed effects, the yield and the pay-out ratio of dividend have been found statistically associated to the price volatilization of respective common stock in Hong Kong. The statical results in this study also find the yield and the ratio of pay-out of dividend are apparently and negatively associated to the price volatilization of respective common stock in Hong Kong. The research outcomes will be a reference for further study on different variables may have effects or volatilize the price of common stock price particularly in Hong Kong capital market.

Keywords

price volatilization of common stock; dividend policy; yield of dividend; pay-out ratio of dividend; Hong Kong

Subject

SOCIAL SCIENCES, Finance

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