Factors effecting dividend policies introduction: dividend policy of a company is the strategy followed to decide the amount of dividends and the timing of the payments. Result indicates that dividend policy has positive effect on shareholders wealth and the study is concluded by indicating some recommendations and areas of future research key words: dividend policy, shareholders wealth, dividend relevance. The effect of taxes on dividend policy of banks in nigeria mr matthias a nnadi researcher in coventry university business school, uk assistant lecturer in the department of business education rivers state university of science & technology, port harcourt, nigeria. The dividend policy of a firm is defined as its dividend payout ratio (the ratio of dividends per share and earnings per share) while the percentage of institutional holdings of a firm’s common stock is used as a proxy for controlling agency costs.
Dividend policy is the set of guidelines a company uses to decide how much of its earnings it will pay out to shareholders some evidence suggests that investors are not concerned with a company's. Dividend policy has a real effect on the firm's investments and cash flows, which would be inconsistent with the dividend irrelevance theorem unfortunately, dividend changes almost always change investors' information set about future earnings, and the earnings information itself is an integral part of the firm's. The constructs of dividend policy that were correlated with market share value were dividend growth rate, dividend payout, and regularity of dividend declaration research methodology the study adopted an explanatory research design.
Institution ownership have negative effect on dividend policy also, he shows that many factors that are found to be significant in the determination of dividend policy are the same as those found in developed markets azhagaiah and sabari (2008) examine the effect of dividend policy on stock prices they find that the. A theory stating that a company's stock price increases or decreases according to changes in the company's policies for example, if a company raises its dividend, investors are more likely to buy that company's stock, which would increase the price likewise, if a company has an excessive amount of debt, investors are unlikely to want to buy the stock and the price will decrease. Dividend policy is concerned with financial policies regarding paying cash dividend in the present or paying an increased dividend at a later stage whether to issue dividends , and what amount, is determined mainly on the basis of the company's unappropriated profit (excess cash) and influenced by the company's long-term earning power. Mohammad salman sarwar abstract - the present paper focuses on the impact of dividend policy on shareholder’s wealth in sugar industries of pakistan. The effect of dividend policy on shareholders wealth is important to management, investors who plan their portfolios some scholars like miller and modigliani, arunprakash and nandhini, believe that dividend policies are irrelevant in determining the wealth of shareholders while others like lintner and gordon,.
The research seeks to investigate the effect of dividend policy on the growth of microfinance institutions 12 statement of the problem dividend policy is the regulations and guidelines that a company uses to decide to make dividend payments to shareholders (nissim & ziv, 2001. Relationship between return on assets, return on equity, growth in sales and dividend policy howatt et al (2009) also concluded that positive changes in dividends are associated with positive future. Cash dividend policy more than share dividend due to it positive effect on the share price as a strategy of increasing the value of the firms if this is done consistently. Dividend policy more than share dividend as a strategy aimed at increasing the value of the firms due to its positive effect on the share price if this is done consistently, the shareholders’ wealth would be maximized in. Dividend policy have an effect on the share prices of the firms quoted at nse thus, companies (firms) should pay dividends to maintain high share prices preview attachment.
Regular dividend policy: in this type of dividend policy the investors get dividend at usual rate here the investors are generally retired persons or weaker section of the society who want to get regular income this type of dividend payment can be maintained only if the company has regular earning. While the dividend history of a given stock plays a general role in its popularity, the declaration and payment of dividends also has a specific and predictable effect on market prices. The dividend policy acts as a signal for investors for gauging the future earning possibilities as expected by the management of the company the dividend policies are directed towards attracting investors to their company. The findings over the effect of dividend policy on market price supports the relevant theory of dividend policy ie walter’s model and gordon’s model key words: dividend policy, market price per share, earning per share.
Of dividend policy and its importance on market price of share because dividend increase will increase the market value of share which automatically affects the wealth of a shareholder and investors will get more return on investment. Corporate dividend policy february 2006 authors henri servaes professor of finance london business school the theory and practice of corporate dividend and share repurchase policy february 2006 2 liability strategies group let us examine the immediate effect on the value of the firm of the dividend payment. Established dividend policies have the effect of reducing the total capital available to management for the purposes of mergers and acquisitions this tends to force executives to be more selective when trying to pursue a deal as money is relatively scarcer. Dividend policy and its effect on share prices (murekefu and ouma, 2012) a number of empirical studies have indicated that, in corporate finance, one of the most essential decisions is related to the response to the question of whether a company’s.