Impact of dividend policy on share price of Nepalese commercial banks

Abstract

This study investigates the impact of dividend policy on share price and stock return in Nepalese commercial banks over fiscal years 2013/14 to 2022/23. Data sourced from Nepal Rastra Bank, annual reports of insurance companies, and published articles are analyzed using financial and statistical tools. A descriptive and causal comparative research design is employed, utilizing correlation and multiple regression models to examine relationships and assess significance. The preliminary findings suggest that both internal (e.g., profitability ratios, solvency ratios, dividend policies) and external factors (e.g., international market conditions) significantly influence stock price volatility. Key drivers identified include earnings per share, dividend per share, dividend payout ratio, bank size, leverage, and market price per share. This research underscores the importance of dividend policies in shaping stock price dynamics within the Nepalese banking sector.

Key words: Earning Per Share, Dividend Per Share, Dividend Payout Ratio, Bank Size , Leverage, Market Price Per Share