Dividend Distribution and Stock Price of Commercial Banks of Nepal

Abstract

ABSTRACT This study investigates the dividend distribution and stock price of commercial banks of Nepal. Secondary data was gathered from commercial banks of Nepal for ten year periods (2013/14-2022/23). This study used descriptive, correlation and multiple regression analysis. This study shows that NABIL bank has to be highest and regular on offering dividend to shareholders. So, this bank is most profitable and the bank has highest profits to distribute to its shareholders. However, this study found that the highest market price per share of SCB means this bank is showing good performance over this period than the other banks. The correlation analysis reveals that dividend per share, earning per share and price earning share have significant positive relationship with market price of stock of sample banks. However, dividend yield has negative and significant relationship with MPS and bank size have significant negative relationship with market price of stock of commercial banks in Nepal. The regression analysis also shows that dividend per share has insignificant positive impact on stock price of the banks. At the same time, earning per share and price earning per share had significant positive impact on stock price. However, dividend yield had insignificant negative impact on stock price. In addition, bank size has insignificant negative impact on MPS of commercial banks in Nepal. Hence, there is insignificant effect of dividend distribution on stock price of commercial banks in Nepal. Key words: Market price, dividend per share, earning per share, price earnings ratio, dividend yield.