Abstract

Transparency and disclosure are two platforms of corporate governance to protect the rights of outside investors. One of the mechanisms through which companies send information signal to external investors is dividend policy. Vietnam is an emerging market and the disclosure of information is not of appropriate concern. This research aims at finding out the impacts of dividend policy announcement in conditions of high and low information transparency on the stock value and stock volatility. In other words, this paper studies the supporting roles of information transparency to dividend policy. It is found that transparency and disclosure reduces stock volatility and enhances stock prices. Therefore, transparency and disclosure is an important factor in the stock market of Vietnam, where most of risks are borned by investors.