Predictability power of firm´s performance measures to stock returns: A compatative study of emerging economy and developed economies stock market behavior.

• Main Authors: Ullah, Saif, Ahmad, Waqar
• Format: Others
• Language: English
• Published: Karlstads universitet, Fakulteten för ekonomi, kommunikation och IT 2011
• Subjects: Stock return; dividend policy measures and stock prices; Business and economics; Ekonomi
• Online Access: http://urn.kb.se/resolve?urn=urn:nbn:se:kau:diva-7866

The stock market returns are the readily available tool for the investor to make investment decision and stock market return are affected by many accounting variables. Dividend policy measures and stock return relationship has been examined from decades but result is still a dilemma. This study is a step forward to solve this dilemma by considering Karachi stock exchange, Pakistan and Nordic stock markets and conducting a comparative study to also provide a knowledge base to readers. Dividend yield ratio, dividend payout ratio and other accounting variables are examined to find their effect on stock return. Pooled least square regression has been used on the data ranging from 2005-2008 and findings are different in different markets. Dividend policy measures (dividend yield ratio and dividend payout ratio) have significant effect on the stock return and in most countries there is significant negative relationship.