ABSTRACT

Though numerous studies have focused on the area of dividend policy, the study on ownership structure, dividend payout policy, andstock price volatility is relatively absent in Bangladesh. Hence, this study intends to fill the gaps by investigating these issues on the listed companies of the DSE in Bangladesh. This study has employed both quantitative and qualitative techniques, including panel data, key informant interviews, and case studies. The sample of this study includes 943 firm-year observations from 71 listed companies of DSE, 15 key informants from diverse groups, and 34 company officials, institutional investors, and individual investors.The collected data havebeen processed using multiple research techniques,including descriptive analysis, Tobit model, fixed effect method, random effect method,and GMM method. The results of the panel estimation technique suggest that institutional ownership has a positive influence on the dividend payoutratio. In terms of how dividend payout policy influences stock price volatility, dividend yield hasa positive influence on the volatilityof stock prices. Sector wise analysissuggeststhat dividend yield has a stronger positive influence onstock price volatility offinancial sector firms than non-financial sector firms. On the other hand, dividend payout ratio has a stronger negative influence onstock price volatility offinancial sector firms than non-financial sector firms. Firm size wise analysis states that the dividend yield of a larger firm has a greater positive influence on the fluctuation of the stock price than the dividend yield of a smaller firm, while the dividend payout ratio has a stronger negative influence onthe stock price volatility oflarger firms than smaller firms. Finally, the results showthat different forms of ownership have no significant influence on stock price volatility, while dividend payout policies have a significant influence on stock price volatility. However, the results obtained from KII and case studies state that a higher presence of institutional investors is associated with a reduction in stock price volatility. The valuable findings of this study provide practical and actionable insights for corporate management, decision-makers, investors, and practitioners, empowering them to make well-informed decisions. Some policy guidelines are suggested to the various stakeholders based on the findings of the study.

Keywords: Ownership Structure, Dividend Payout Policy, Stock Price Volatility, Dhaka Stock Exchange Limited, Bangladesh