DIVIDEND POLICY AND STOCK PRICE BEHAVIOR IN MALAYSIA AND THAILAND

• Main Author: WONG, WAI KIT
• Format: Final Year Project Report
• Language: English
• Published: Universiti Malaysia Sarawak, (UNIMAS) 2014
• Subjects: HG Finance
• Online Access: http://ir.unimas.my/id/eprint/37142/3/WONG%20WAI%20KIT%20ft.pdf; http://ir.unimas.my/id/eprint/37142/
• Institution: Universiti Malaysia Sarawak

This paper attempts to examine the impact of dividend policy on the stock price behavior in Malaysia and Thailand. For this purpose, a sample of 30 listed companies from Kuala Lumpur Stock Exchange and 15 listed companies from the Stock Exchange of Thailand are randomly selected and examined for a period of 10 years from 2004 to 2013. The dependent variable of stock return is regressed against the dividend policy and the independent variables are dividend yield, dividend payout ratio, size of firm and asset growth rate. This study applles panel data approaches to analyze the relationship between the stock price behavior and dividend policy as well as the controlling variables. The empirical results of this study show that there are significant positive relationships between the stock return with dividend yield and asset growth rate in Malaysia. Dividend payout ratio and size of firm have a negative relationship with the stock return however it is not significant. In Thailand, dividend policy and other two variables cannot determine the stock return. All the independent variables are insignificant to influence stock return. After combining data of Malaysia and Thailand, only asset growth rate is found to be significant to influence stock price behavior. Dividend policy and size of firm have no impact on the stock return. The results of this study have major implications to investors and management of the firms.