Effect of Dividend Announcement on Stock Prices in Banking Industry of Pakistan

This paper proves the result of change in dividend on the stock price. The sample of the population depends on the three banking sector of Pakistan which is Bank Al-Falah, UBL and MCB. In this paper descriptive data was gathered of the five years (2008-2012) related the Banking sectors of the payment of dividend and stock price. The descriptive statistics and regression analysis represent that there is positive or negative relationship has been found between the dividend and stock price. It is proved that the dividend has positive regression with the earning per share and negative regression dividend with the stock price.