dividend policy
THE ROLE OF DIVIDEND POLICY IN STOCK PRICE DETERMINATION IN TELECOMMUNICATION INDUSTRY: THE CASE
OF PLDT AND GLOBE
FATIMA KAYE A. DE CHAVEZ, LORELLA A. ESPELETA and LESLIE JOY A. PATIO
College of Business and Accountancy
University of Batangas
ABSTRACT
The issue of how much a company should pay its stockholders, as dividend is one that has been of concern to managers for a long time. The optimal dividend policy of a firm may be defined as the best dividend payout ratio the firm can adopt. But, what does "best" mean in this concept? This paper is an attempt to explain the effect of Dividend Policy on the Stock Prices by taking the top two Telecommunications Company namely Philippine Long Distance Telephone Company and Globe Telecom. Other various websites were reviewed to see the significance of these dividend policies on the determination of stock prices. Charts, tables and other significant information of these two telecommunication companies which have been evaluated served as the methodology used by the researchers. The study identified that these top two telecommunication companies have different dividend policies being implemented. This difference among the two companies does not have a significant impact as long as stock price determination is concerned. The study also showed that an increase or a positive change in the company 's dividend ratio gives a higher dividend among stockholders, yet several minor reductions to dividends have occurred due to capital acquisition during the years subject to observation, specifically on PLDT Company. Taken as a whole, the study revealed among other things that as the dividend payout ratio increases as well as dividends, their corresponding stock prices respond directly. On this note the study recommended Telecommunication Companies to maintain their current standing of pay-out ratio. This is to assure the satisfactory of dividend payments to stockholders that will lead to higher stock prices in the market,
OF PLDT AND GLOBE
FATIMA KAYE A. DE CHAVEZ, LORELLA A. ESPELETA and LESLIE JOY A. PATIO
College of Business and Accountancy
University of Batangas
ABSTRACT
The issue of how much a company should pay its stockholders, as dividend is one that has been of concern to managers for a long time. The optimal dividend policy of a firm may be defined as the best dividend payout ratio the firm can adopt. But, what does "best" mean in this concept? This paper is an attempt to explain the effect of Dividend Policy on the Stock Prices by taking the top two Telecommunications Company namely Philippine Long Distance Telephone Company and Globe Telecom. Other various websites were reviewed to see the significance of these dividend policies on the determination of stock prices. Charts, tables and other significant information of these two telecommunication companies which have been evaluated served as the methodology used by the researchers. The study identified that these top two telecommunication companies have different dividend policies being implemented. This difference among the two companies does not have a significant impact as long as stock price determination is concerned. The study also showed that an increase or a positive change in the company 's dividend ratio gives a higher dividend among stockholders, yet several minor reductions to dividends have occurred due to capital acquisition during the years subject to observation, specifically on PLDT Company. Taken as a whole, the study revealed among other things that as the dividend payout ratio increases as well as dividends, their corresponding stock prices respond directly. On this note the study recommended Telecommunication Companies to maintain their current standing of pay-out ratio. This is to assure the satisfactory of dividend payments to stockholders that will lead to higher stock prices in the market,
Bibliography: Khen. 2012. Top Business Finance Articles. Largest Telecommunications Company in the Philippines. Mokaya, Nyang’ara, Lilian Tintira James. 2013. The Effect of Dividend Policy on Market Share Value in the Banking Industry; The Case of National Bank of Kenya. International Journal of Arts and Commerce.Vol. 2 No. 2. Persson, Rickard. 2013. Dividend Policy Behavior: An Analysis of Firms listed at Stockholm Stock Exchange. Ekonomikum – Centre for Economic Sciences. Electronic copy available at: uu.diva.org. Sadiq, Ahmad,Suliman, Sayyad-Ul-Abrar and Khan Sujata Kapoor. 2009. Impact of Dividend Poicy on Shareholder’s Value: A Study of Indian Firms. PLDT.http://www.pldt.com/docs/default-source/bod/cash-dividend-declaration-for-all-outstanding-shares-of-voting-preferred-stock.pdf?sfvrsn=0