Impact of dividend policy on stock price of selected nepalese commercial banks

Abstract

The topic of this dissertation is "Impact of Dividend Policy on Stock Price of Selected Nepalese Commercial Banks." The study's main goal is to investigate how dividend policies affect Nepalese commercial banks' stock market values. Purposive sampling is used to select the data for this descriptive and analytical study design. The study makes use of secondary data sources, which are logically and thematically analyzed and interpreted. The performance of commercial banks and other financial institutions depends on their dividend policies because they serve as a major incentive for shareholders and promote investment. Using the proper descriptive and statistical methodologies, this dissertation examines data from three commercial banks covering the fiscal years 2011–12–2020–21. The results show that market price per share (MPS) is positively correlated with price-earnings ratio (P/E), dividend payout ratio (DPR), earnings per share (EPS), and dividend per share (DPS). On the other hand, there is a negative correlation between MPS and the dividend yield ratio (DYR). Additionally, the study finds a strong link between MPS and both P/E and DPS. On the other hand, the relationship between MPS and DYR and DPR is negligible. On the basis of these results, it is advised that businesses share accurate details about their dividend policy, operations, and results. Investors are able to assess the company's status and make well-informed investment decisions because to this transparency. Dividend policies should therefore be carefully taken into account by investors when forecasting future returns and choosing investments. Key Words: Market Price per Share, earning per share, Dividend per Share, Dividend Payout Ratio, Price Earnings Ratio, Dividend Yield Ratio.