IMPACT OF LIQUIDITY ON PROFITABILITY OF JOINT VENTURE BANK IN NEPAL

Abstract

This study aims to analyze the impact of dividend policy on the stock price of Life insurance companies in Nepal. The study investigates the connections between different dividend policy indicators and stock prices using secondary data from ten insurance companies spanning an eight-year period, from 2014/15 to 2022/23. Market price per share (MPS) and important financial indicators, such as earnings per share (EPS), dividend per share (DPS), dividend payout ratio (DPR), and price-to-earnings (P/E) ratio, are found to positively correlate, according to the investigation. For these associations,statistical significance isreported at the 0.05 level. The analysis of the dividend policy components shows that the regression model has a moderate explanatory power, as it accounts for 25.90% of the variance in MPS. The results indicate that while DPR has no discernible effect, MPS is greatly impacted by DPS, P/E Ratio, and EPS. The model's fit is validated by the ANOVA results, supporting the conclusions' validity. The study also found the significance of earnings and valuation indicators in influencing stock prices and directing dividend policy decisions, offering insightful information to insurance company owners, managers, and directors.