Impact of Dividend Policy on Share Price A Case of Listed Firms on the Ghana Stock Exchange

This article dissects the consequence of dividend policy (guideline) on prices of shares indexed on the Ghana Stock Exchange (GSE). The study considered fourteen (14) quoted firms which have made not less than one dividend payment in five (5) years, Dividend-price-ratio, dividend-payout-ratio, retention-ratio and earnings per share, Net Profit after tax, firm size, and growth of total assets being our explanatory variables. The purposively sampled data ranges from 2009 to 2018. Pooled regression, fixed-effect and random-effect tests were run since the data is panelled. Hausman's test was applied to select the most appropriate model. Therefore, fixed-effect results were selected. The empirical results obtained from the fixed-effect regression propounds a positive magnetism amidst market price per unit share and dividend-payout-ratio substantiating that an upswing in dividend for each share stimulates an upsurge in the market price for each share of a quoted firm. However, it was not noteworthy; that Dividend-price-ratio was negatively substantial at a 10% margin of error. Also, retention-ratio was negatively insignificant to determine the market price per unit share.Earnings per unit share remain the principal major determinant of share price; consequently, it has significant ascendancy on the market value of public listed firms on GSE. Besides, Net Profit after tax and firm size had a weighty influence in determining the price of a share.