The Effect of Dividend Policy on Company’s Market Price per Share
The Effect of Dividend Policy on Company’s Market Price per Share

Summary/Abstract: The study aims to determine the nature of the effect produced by dividend policy on the market price per share as a factor of company’s efficiency. In this regard, the study develops the concept of direct functional effect of the dividend policy on the market price of the company’s stock. The principal advantage of this approach is represented by the possibility to determine the intensity of change and the elasticity of the market price per share affected by the dynamics of dividend payout ratio given the institutional environment and the industry the issuer belongs to. It also helps determine the influence and provides arguments for establishing the modern type of companies’ dividend policies under the conditions of both developing and developed stock markets. This approach establishes directly proportionate meaningful effect produced by the company’s dividend policy on the market price of its shares and makes the basis for improving theoretical foundations of dividend policy management systems in joint stock companies.

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