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The Influence of dividend policy on sharia stock price volatility:A study on Indonesian stock exchange

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  • Irton Irton

    (Accounting Department, AmikomUniversity Yogyakarta, 55283 Indonesia)

Abstract

The main object of this research is to examine whether dividend policy in the form of dividend payout ratio and dividend yield influences the volatility of sharia stock price in the Indonesian Stock Exchange. This research uses the quantitative method by using the secondary data collected from the published Indonesian Stock Exchange. The sample in this research is 106 companies registered in the Indonesian Sharia Stock Index (ISSI) in 2016-2018. The dependent variable in this research is stock price volatility while the independent variables are dividend payout ratio, dividend yield, and data of earnings volatility, debt, and size that are collected and processed from the company financial report. Multiplied regression analysis is used for correlation test and hypothesis test using the SPSS software program version 15.0. The result of the research shows a shred of evidence that dividend per share and dividend payout ratio have no influence on the stock price volatility. The result of research can help the investors to select the sharia shares, and for companies, this research is useful to determine the dividend policy. Key Words:Dividend per share, dividend payout ratio, earnings volatility, stock price volatility

Suggested Citation

  • Irton Irton, 2020. "The Influence of dividend policy on sharia stock price volatility:A study on Indonesian stock exchange," International Journal of Research in Business and Social Science (2147-4478), Center for the Strategic Studies in Business and Finance, vol. 9(7), pages 84-92, December.
    • Handle: RePEc:rbs:ijbrss:v:9:y:2020:i:7:p:84-92
    DOI: 10.20525/ijrbs.v9i7.921
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    References listed on IDEAS

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    3. Duy T. Nguyen & Mai H. Bui & Dung H. Do, 2019. "The Relationship Of Dividend Policy and Share Price Volatility: A Case in Vietnam," Annals of Economics and Finance, Society for AEF, vol. 20(1), pages 123-136, May.
    4. Suwanhirunkul, Prachaya & Masih, Mansur, 2018. "Effect of dividend policy on stock price volatility in the Dow Jones U.S. index and the Dow Jones islamic U.S. index: evidences from GMM and quantile regression," MPRA Paper 93543, University Library of Munich, Germany.
    5. Merton H. Miller & Franco Modigliani, 1961. "Dividend Policy, Growth, and the Valuation of Shares," The Journal of Business, University of Chicago Press, vol. 34, pages 411-411.
    6. Black, Fischer & Scholes, Myron, 1974. "The effects of dividend yield and dividend policy on common stock prices and returns," Journal of Financial Economics, Elsevier, vol. 1(1), pages 1-22, May.
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