Change search
CiteExportLink to record
Permanent link

Direct link
Cite
Citation style
  • apa
  • harvard1
  • ieee
  • modern-language-association-8th-edition
  • vancouver
  • Other style
More styles
Language
  • de-DE
  • en-GB
  • en-US
  • fi-FI
  • nn-NO
  • nn-NB
  • sv-SE
  • Other locale
More languages
Output format
  • html
  • text
  • asciidoc
  • rtf
Do Dividend Yields Affect a Stock Price's Volatility?: Does the Miller & Modigliani Theroem apply to the Euronext and London Stock Exchange?
Jönköping University, Jönköping International Business School, JIBS, Economics.
Jönköping University, Jönköping International Business School, JIBS, Economics.
2019 (English)Independent thesis Basic level (degree of Bachelor), 10 credits / 15 HE creditsStudent thesis
Abstract [en]

Background: Investors around the globe have debated, for more than 40 years, about whether the dividend yield has an influence on a stock’s price or not. There are different theories supporting both sides. These theories, however, often simplify the real world and therefore may not apply fully.

Purpose: The purpose of this paper is to conduct empirical research on the complicated dividend policy topic and find out whether the dividend yield influences a stock’s price by testing for its effect on stock price volatility. This result finds evidence of whether investors disregard, or regard, any dividend payments and if it influences investors decisions when purchasing stock.

Method: We take the top valued companies in the non-financial sector from the LSE and the Euronext between the years 2008 and 2017. We then run a Fixed Effect Model regression taking some of their reported values including their dividend yield and their stock price volatility.

Conclusion: Our results indicate that the dividend yield a company pays stockholders has a positive influence on the stock price volatility, thus affecting the prices of stocks. These results counter the MM Theorem and are inconclusive with the main principles of the Bird in Hand Theorem by Gordon (1960) and Lintner (1962).

Place, publisher, year, edition, pages
2019. , p. 32
Keywords [en]
Dividend Yield, Stock Price Volatility, Bird in Hand Theory, BIHH, Miller & Modigliani, MM Theorem, LSE, Euronext, FTSE, Euronext-100
National Category
Economics
Identifiers
URN: urn:nbn:se:hj:diva-44461ISRN: JU-IHH-NAA-1-20190158OAI: oai:DiVA.org:hj-44461DiVA, id: diva2:1324313
Subject / course
JIBS, Economics
Supervisors
Examiners
Available from: 2019-06-25 Created: 2019-06-13 Last updated: 2019-06-25Bibliographically approved

Open Access in DiVA

Hoffmann_Marriott(572 kB)23 downloads
File information
File name FULLTEXT01.pdfFile size 572 kBChecksum SHA-512
11799e33ff13374dea89f072cd4bf29d54ac274fa090eccb02f2996570712073b34babd00605ebf947b82a8f32086789dc804305837bb9cb3d6b33be4e9e6866
Type fulltextMimetype application/pdf

Search in DiVA

By author/editor
Hoffmann, JoeMarriott, Nicholas
By organisation
JIBS, Economics
Economics

Search outside of DiVA

GoogleGoogle Scholar
Total: 23 downloads
The number of downloads is the sum of all downloads of full texts. It may include eg previous versions that are now no longer available

urn-nbn

Altmetric score

urn-nbn
Total: 63 hits
CiteExportLink to record
Permanent link

Direct link
Cite
Citation style
  • apa
  • harvard1
  • ieee
  • modern-language-association-8th-edition
  • vancouver
  • Other style
More styles
Language
  • de-DE
  • en-GB
  • en-US
  • fi-FI
  • nn-NO
  • nn-NB
  • sv-SE
  • Other locale
More languages
Output format
  • html
  • text
  • asciidoc
  • rtf