摘要：The fundamental objective of this paper is to investigate the relationship between dividend policy and market prices (MP) of shares by capturing dividend per share as independent variable along with controlling of earning per share (EPS) & return on equity (ROE) of twelve listed companies at Karachi Stock Exchange, Pakistan for the period 2005-2010. A pool of 12 listed companies at KSE-100 Index with 6 years annual data from 2005 to 2010 is established and pooled OLS regression model is applied to examine that how the stock prices are affected by the dividend policy. After applying pooled OLS positive significant relationship between MP and DPS, EPS and negative but insignificant between ROE and MP is observed. These findings illustrate the value of dividend policy. In provisions of policy implications, this study depicts formulating dividend policy keeping in view the firm value and attention can be strained towards financing of the corporation as well.
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