Abstract:
This study aims to examine the relationship between dividend policy and the
share price volatility (SPV) of the service sector companies listed on the
Colombo Stock Exchange (CSE). The data set used in this research was
compiled from financial statements of thirty data observational points of 10
listed service sector companies. After adjusting for firm size, four important
variables—asset growth, earning volatility, dividend yield, and dividend
payout—have been chosen as the independent variables. The volatility of the
stock price has been taken as the dependent variable. The magnitude of the
effects was used to examine the relationship between SPV and dividend policy.
First, the relationship between SPV, dividend payout ratio (DPR), and
dividend yield (DY) is regressed. Second, the relationship between SPV and
dividend policy is investigated using firm size as a control variable. In both
