There are several factors that influence whether a company pays a dividend and how much it chooses to pay while there are too many possible factors to list here , these are some of the most influential is the company's income stable income stability is one of the top factors in determining dividend policies specifically. Most companies view a dividend policy as an integral part of the corporate strategy management must decide on the dividend amount, timing and various other factors that influence dividend payments over time there are three types of dividend policies: a stable dividend policy, a constant dividend policy and a residual. Najjar (2009) conducted research in jordan and used dividend per share, leverage, earning per share, institutional ownership, return on equity, and business risk as variables he concluded that the factors which affect the likelihood of dividend payment are similar to those which affect the dividend policy. Chapter 1 introduction dividend policy is the decision for the firm to pay out earnings verses retaining and reinvesting them dividend decision has remained one of the tough challenges for financial economists we are yet to understand completely the factors that influence dividend decision and the manner in which. Dividend policy in different markets this section formulates seven expected signs (hypotheses) to further examine the factors, which may affect corporate dividend policy this section also explains the appropriate proxy variables used to measure the factors affecting dividend payouts as regards the empirical literature the. This post describes different determinants of dividend policy. This article analyzes the present situation of dividend distribution of listed banks in china based on the 2010-2013 panel data, the results show that some of the listed banks do not pay dividend, but the proportion is small, the dividend payment rate is generally low but the state-controlled banks often have a higher rate. 69 on the rankings of the various factors that affect dividend policy the findings from this study will guide managers in their dividend decision making, by highlighting the key factors that stable companies quoted on the nairobi securities exchange consider in making their dividend decisions the study will also inform the.
Abstract dividend policy is an unsolved mystery in the field of finance even after decades of investigations, scholars still disagree on the factors that influence dividend decisions of companies hence, this paper explored the determinants of dividend policy of companies listed on the stock exchange of. Dividends are corporate profits distributed to shareholders dividend payment factors include company profitability, capital needs, stock price trends and investor expectations a company must act in the best interest of its shareholders, so in making dividend decisions it considers the impact on the company. Dividend policy is a key decision area in the field of corporate financial management firms view dividend policy very important because it determines what funds flow to investors and what funds are retained by the firm for reinvestment there are many theoretical explanations as to the factors influencing dividend policy.
2004, the icfai journal of applied finance factors influencing dividend policy decisions of corporate india the present study analyzes the results of 2001 survey of 81 cfos of bt-500 companies and her most valuable psus in india to find out the determinants of the dividend policy decisions of the corporate india. Nature of the factors which influence the dividend policy of a firm growth and profitability: the amount of growth a firm can sustain and its profitability is related to its dividend decisions, so long as the firm (because of managerially imposed to external market constraints) cannot issue additional equity liquidity: the liquidity.
Costs, information, and taxes as well as the capital structure of firms” this suggested that much more research needed to be undertaken on dividend policy in developing economies 51 factors affecting dividend decision dividend decision, one of the important aspects of company's financial policy, is not an. It has been argued that dividend policy has no effect on either the price of a firm's share or its cost of capital if dividend policy has no significant effects, then it would be irrelevant thus, extensive studies were done to find out various factors affecting dividend payout ratio of a firm the setting of corporate dividend policy. Factors influencing dividend policy are legal restrictions of proposed dividends, cash needs of the company, restrictions in debentures, loan agreements and provisions in character on dividend payment etc.
Dividend policy of a company sets the guidelines to be followed while deciding the amount of dividend to be paid out to the shareholders to learn more click.
Miller & modigliani's irrelevance theorem followed by criticism on this theorem by several researchers next, are several theories that explain dividend policy, for example, the signaling theory and the clientele theory are discussed some other factors influencing dividend policy will be discussed in short. Factors affecting dividend policy of a firm are growth, leverage, trends of profit, inflation, government policy, business cycle, liquidity, taxation etc. Therefore companies have a stable dividend payout in comparison to earnings ( bohren, 2009) dividend policies of a company are dependent upon multiple fa ctors like, growth, profitability, size investment and capital structure the most important factors affecting dividends are pattern of past dividends announced current. Factors affecting the dividend payment policy of the listed companies on the ho chi minh stock market nguyễn thị huyền banking academy no 12 , chua boc street , dong da district , hanoi , vietnam 1 introduction accounting to 2015, vietnam stock market has launched for 15 years, and started to operate officially.