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Blekinge Institute of Technology

In:

Submitted By munemu
Words 14412
Pages 58
School of Management

Blekinge Institute of Technology

Determinants of Share Price Movements in Bangladesh: Dividends and Retained Earnings

Author

Shohrab Hussain Khan

Supervisor Mr. Anders Hederstierna

Thesis for the degree of MSc. in Business Administration Spring, 2009

Thesis Summary
Title: Determinants of Share Price Movements in Bangladesh: Dividends and Retained Earnings Author: Shohrab Hussain Khan Supervisor: Anders Hederstierna Department: School of Management, Blekinge Institute of Technology Course: Master’s thesis in Business Administration, 15 credits (ECTS). Background and Problem Discussion: Financial scholars have been conducting studies of dividend policy for several decades; but different researchers have come to different conclusions. Financial economists have come to different conclusion about factors determining dividend policy and effect of dividend policies on common stock price. A general question may arise in the mind of the shareholders that the corporate dividend policy affects the value of their stocks. So, in addition to the theory of dividend policy, it is necessary to discuss the empirical evidence on the dividend payment practices of the corporations and their possible impacts on common stock prices. Empirical testing of dividend policy may focus on whether the determinants carry information in pricing the common stocks and whether the dividends are the only determinants serving as signals in conveying information about the current and future earnings of the corporation. Purpose: The present study will strives on the relative importance of dividends, retained earnings, and other determinants in the explanation of stock prices in Bangladesh with particular stock price of the companies associated with Dhaka Stock Exchange (henceforth DSE), an emerging capital market of Bangladesh. The prime objective of this study

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