Investigating the Effect of Dividened on the Return of Accepted Companies in Tehran Stock Market in Advancing and Declining Market

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Imenpour, Amir | 2011

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Type of Document: M.Sc. Thesis
Language: Farsi
Document No: 41954 (44)
University: Sharif University of Technology
Department: Management and Economics
Advisor(s): Zamani, Shiva
Abstract:
In contrast to the Modigliani and Millers’s theory which states that dividends do not affect the return of the companies, many of findings illustrate the importance of dividends for the stockholders. This is the subject of the present research which is run by the statictic test and the Fama & French three factor model in two regular and modified versions based on the data which is driven from the Iran’s stock market. What is seen is that the return of the stock for the companies which make dividends is more than the companies which do not pay dividends for their stockholders. In addition, the results show that the return of the companies which offers dividend to their stockholders is more than the companies which do not pay dividends in declining market. These results are compatible the descriptions of prospect theory and credible communication explanation. In addition, these results shows that the difference between the return of dividend payers and the others in advancing market is more than the period of declining market which is in contrast with prospect theory and credible communication explanation.
Keywords:
Dividend ; Fama and French Three Factor Model ; Prospect Theory ; Tehran Stock Exchange ; Declining Market ; Advancing Market ; Credible Communication

No TOC