The study employed the panel data regression model to analyze the data and to investigate the possible link among the variables identified. Policies in japan, journal of corporate finance 5 2. Factors influencing capital structure and dividend policy. Global journal of management and business research a volume xiv issue vi version i y ear 64 2014 dividend policy and firm performance. International journal of business and social science vol. An alternative is to remove the conditions that give rise to the inconsistency, viz. Selecting a sample of 73 firms from karachi stock exchange nazir, s 2010 tried to find the determinants of dividend policy in pakistan for the.
Subscribe to this fee journal for more curated articles on this topic followers. Even though an extensive amount of research regarding dividends has been conducted, the results and conclusions are not. The effects of dividend yield and dividend policy on common stock prices and returns. The decision to pay dividends, and the amount to be paid, are two different parts. The concept of dividend policy has been heavily focused by nancial scholars for the past decades. To see this, note that if managers paid the dividend but raised funds for the bad projects through new equity issues, no value would be created. Hafeez ahmed and attiya javid 2009, dynamics and determinants of dividend policy in pakistan evidence from karachi stock exchange nonfinancial listed firms, international research journal of finance and economics, issn 14502887 issue 25. This study therefore comes in to fill the void by establishing whether there is a relationship between dividend payout and firm performance among listed companies in kenya. Access to the online full text or pdf requires a subscription. Dividend policy in this section, we consider three issues. Corporate dividend policy february 2006 authors henri servaes professor of finance london business school peter tufano sylvan c. Relatively little research has yet been published examining the dividend policies of companies from emerging countries. Evidence from the manufacturing companies listed on the colombo stock exchange. The impact of ownership structure on dividend policy.
Journal of emerging issues in economics, finance and banking jeiefb an online international research journal issn. Economic fluctuation and dividend policy in china journal of. Sectoral analysis of factors influencing dividend policy. Therefore researchers interested in studying about the dividend policy and try to find the relationship between profitability, liquidity, leverage, firm size and growth opportunities to dividend policy. A dividend is a cash payment, madetostockholders,from earnings. Dividend policy will not only assist in reducing the agency costs but will also act as a signal to give information to the shareholders about the firms valuation. Dividend policy has positive effect on roa and growth in sales. The impact of dividend policy on share price volatility in. The journal of business the graduate school of business of the university of chicago vol. Theories of dividend policy dividend equity securities. Dividend policy and investor pressure sciencedirect. Capital structure, dividend policy, and multinationality.
The dividend policy decisions of firms are the primary element of corporate finance policy uwuigbe, et al. The dividend is a relevant variable in determining the value of the firm, it implies that there exists an optimal dividend policy, which the managers should seek to determine, that maximises the value of the firm. Introduction corporate dividend policy has long been an issue of interest and is part of the most controversial topics in in the financial literature. Corresponding author, faculty of business, alhosn university. Chandra 2002 sees dividend policy as that which determines the proportion of earning paid to shareholders. Millert and franco modiglinit tz ixeffect of a firms dividend policy on the current price of its shares is a matter of considerable importance. This item may be available elsewhere in econpapers. The impact of dividend per share on common stock returns.
For this purpose, a sample of 84 companies from 142 consumer product companies listed in main market of bursa malaysia were selected and the relationship between share price volatility with two main measurements of dividend policy, dividend yield and payout, were examined by applying multiple regression for a period of six years from 2005 to 2010. An empirical investigation of the impact of dividend. The effect of dividend policy stability on the performance. Determinants of dividends in indian pharmaceutical companies. Determinants of dividends in indian pharmaceutical companies dr. Iosr journal of business and management iosrjbm eissn. A negative relationship exists between roa, leverage and dividend policy. Dividend and category of dividend dividend is the payment made by a company to its shareholders, usually in the. International journal of humanities and social science vol. Also, ftse 100 firms, that are most focused on shareholder value. Dividend policy is influenced by various determinants of dividend. Dividend policy under asymmetric information merton h.
Pdf the aim of this article is to analyze the various aspects of dividend policy. Emphasizing tax issues, theoretical frameworks of informational. It is important to examine the factors that impact capital structure and dividend policy so that appropriate control variables can be included in the examination of the impact of multinationality on capital structure and dividend policy. Prof, apgcms, rajampet, kadapa abstract dividend is the portion of corporate profits paid out to stockholders. But dividends is not a new phenomenon, payouts to shareholders have been a standard procedure for most.
The dividend payout policy is one of the most debated topics within corporate finance and many academics have been trying to find the missing pieces in the dividend puzzle for more than a half century baker, 2009 p. Global journal of management and business research volume 12 issue 5 version 1. The third is an empirical examination of some patterns that firms follow in dividend policy. May 2012 298 the impact of ownership structure on dividend policy evidence from emerging markets kse100 index pakistan hamid ullah national university of modern languages islamabad, pakistan asma fida national university of modern languages. The question, when and why do firms pay dividends, is still valid. The data sample for this study is drawn from 81 firms listed on the nigeria stock exchange during the period 2001 to 2010.
The firm can either declare a cash dividend which it pays to all its common stockholders. Dividend policy of an organization and how it affects their performance has remained one of the hottest and keenly debated issues till date. Dividend policy has been still a controversial issue in corporate finance. A reexamination international journal of managerial studies and research ijmsr page 77 greatly, and might render the tax factors relatively insignificant in determining asset returns and the cost of capital in equilibrium. Several issues in relation to theories and dividend patterns towards the behavior of corporate have been investigated. Article pdf available in ssrn electronic journal october 2010 with. Dividend policy under asymmetric information 1033 one route, to the restoration of time consistency. Global journal of management and business research.
Dividend policy gitman and hennessey chapter 11 spring 2004 outline 11. The purpose is to describe the research methodology of this study. May 2011 201 the effect of dividend policy stability on the performancee of banking sector listed on amman stock exchange dr. The study will further investigate whether a companys dividend policy is the best indicator of a less volatile stock, that can reassure them of a safe and stable investment. Dividends and dividend policy chapter 16 a cash dividends and dividend payment. In this study, researchers will examine with some real life sample commercial banks listed in dhaka stock exchange that whether the dividend policy has any effect on the firms share price determinants as with compare to many in members other than the. The focus of our study is to investigate the impact of ownership structure on the dividend policy. Evidence from insurance firms in the kenya micheal muriithi wanjohi master of business administration, jomo kenyatta university of agriculture and technology, kenya 2017 international academic journal of economics and finance iajef issn 25182366 received. The impact of ownership structure on dividend policy the. The policy of dividend decisions is one of the most important issues in nance. Various factors influencing a firms dividend policy have been evaluated by researchers. Iosr journal of economics and finance iosrjef eissn. There is a positive relationship between payout ratio and debt frank and goyal, 2004. Dividend policy, growth, and the valuation of shares.
Quarterly journal of economics, december 95, august, 124. The second is an examination of widely used measures of how much a firm pays in the dividends. We find that firms adopt a higher dividend payout to discourage takeover bids. One is a purely procedural question about how dividends are set and paid out to stockholders. Dividend policy is one of the most debated issues within corporate finance. The policy has been framed broadly in line with the provisions of the companies act and also taking into consideration, guidelines issued by sebi to the extent applicable. Although research on dividend policy is a topic that has long and widely studied, but the results are still mixed. Nevertheless, dividend policy is a secondorder policy because th e increase in dividends is taken into account only after investments and the needs of funds necessary to firm operations. Determinants of dividend payout of financial firms and non. This study investigates the possible impact of dividend policy on the value and performance of firms in developing economies. Impact of dividend policy on shareholders wealth and firm. Vast literature has examined the dividend policies of firms from developed countries, especially from u. If the payment is from sources other than current earnings, it is called a distribution or a liquidating dividend. Further reproduction prohibited without permission.
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