Factors affecting dividend decisions pdf

It investigates dividend decision in 299 companies listed in nigeria on nigerian stock exchange market. A read is counted each time someone views a publication summary such as the title, abstract, and list of authors, clicks on a figure, or views or downloads the fulltext. Factors affecting dividend policy finance management notes. This study analyzes the firmspecific factors affecting the dividend payout decisions of the companies whose shares are traded on the. The theory suggests that the theory suggests that dividends are usually paid out of the annual profits, which represents the. This study aims at finding specific financial factors affecting dividend in pakistan. Financial management part 4, dividend decision factors. Most of the firms have target dividend payout ratio and dividend changes follow shift in the longterm sustainable earnings. If dividend is to be paid, then what amount to be paid is required to be decided.

The corporate, institutional and legal factors that influence the dividend decision of a firm include the growth and profitability of the firm its liquidity position, the cost and availability of alternative forms of financing concerns about the managerial control of the firm, the existence of external largely legal restriction and the impact of inflation of cash flow. What are the main factors that influence the dividend decisions. Some of the factors affecting dividend policy of a firm or company or business are as follows. That is why it makes sense to consider profitability as a threshold factor and profit level as one of. Dividend decisions, as the very name suggests, refers to the decisionmaking mechanism of the management to declare dividends. A companys ultimate objective is the maximization of shareholders wealth. Factors influencing corporate dividend payout decisions of. The factors that affect dividend policy in developed. Factors influencing dividend payout policy of firms listed on the. Returns to investors are paid out of the present and past income. Factors affecting dividend policyin an emerging capital markets.

Dividend is the distribution of profit or the portion of net income paid out to shareholders. What are the main factors that influence the dividend. It is paid to shareholders in cash or stock for making investment and bearing risk. Factors affecting dividend policy a company is raising funds from different sources, it includes debentures, preference shares and equity shares. Various factors influencing a firms dividend policy have been evaluated by researchers. Investigate the factors affecting dividend policy in. Payment to debenture holders and to preference share holders are at a fixed rate. We estimate the determinants for a given firm to pay dividends to its shareholders through probit specifications.

Again this decision will be taken in such a way so that it. It is crucial for the top management to determine the portion of earnings distributable as the dividend at the end of every reporting period. What are key factors that influence dividend policies. The corporate, institutional and legal factors that influence the dividend decision of a firm include the growth and profitability of the firm its liquidity position, the.