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Theoretical evidence shows that dividend policy is still unresolved issue of finance. After the development of the MM (1961) irrelevant theory many researcher relaxes the assumptions of MM to find the out the association between stock prices behaviour paying dividend policy to maximize the value of the firms. Most of the theories focus that dividend has impact on stock prices. This study uses a panel dataset of 319 non-financial businesses registered on the Pakistan Stock Exchange for the years 2011 through 2022 to examine the impact of corporate governance and ownership structure on the link between corporate stock price and dividend policy. For the analysis, we used panel regression models. According to the findings, institutional ownership and concentrated ownership have no substantial impact on the link between stock prices and dividend policy, although corporate governance and institutional ownership do. The results also demonstrate a relationship between large dividend payments and firm-level corporate governance, suggesting that this institutional mechanism aids in minimising agency issues and enables businesses to deploy capital more effectively. The conclusions offer useful information for businesses in designing sustainability initiatives and developing dividend policy in light of ownership structure. Additionally, it provides policy recommendations for corporate financing in emerging markets. The study also recommends that tenure of the government and delisting probability has more impact on stock prices of dividend payers firms.