Document Type : Research Paper
Author
Department of Economics , Faculty of Management and Economics , Sharif University
Abstract
This study explores the relationship between the stock price volatility and dividend policy (dividend yield and dividend payout ratio) In Tehran Stock Exchange (TSE). According to Baskin's (1989) and Allen and Rachim's (1996) studies, the fixed effect and random effect regression models are applied in this research. The sample of data is composed of 200 public firms listed on the TSE and continuously paid dividends from 2010 to 2020. The results indicate that the dividend policy has a significantly negative relationship with the stock price volatility. In addition, the company's size is negatively related to the stock price volatility and is a statistically significant relationship. As a result, managers can partly control the stocks' risks and thus affect investors' investment decisions through a firm's dividend policies.
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