The Impact of Initiating Dividend Payments on Shareholders' Wealth

1983 ◽  
Vol 56 (1) ◽  
pp. 77 ◽  
Author(s):  
Paul Asquith ◽  
David W. Mullins, Jr.
Keyword(s):  
Dividend Payments ◽  
The Impact

Threshold capital structure and predictors of choice between distribution strategies

2021 ◽  
Vol 14 (1) ◽  
Author(s):  
Mpinda F. Mvita ◽  
Leon M. Brummer ◽  
Hendrik P. Wolmarans
Keyword(s):  
Capital Structure ◽  
Fixed Effects ◽  
Structural Equation ◽  
Multinomial Logistic Regression ◽  
Threshold Effect ◽  
Equation Model ◽  
Managerial Implication ◽  
Dividend Payments ◽  
Value Add ◽  
The Impact

Orientation: The determination of a threshold capital structure and company specific attributes as predictors of choice between distribution strategies is crucial in the creation of shareholders’ wealth.Research aim: To investigate whether the change in regimes given a threshold capital structure maximises distribution strategies over the period 1990–2017 and 1999–2017. In addition, the study examined how the capital ratio and company specific attributes were used in the process of choosing between distribution strategies.Motivation for the study: The need to determine the impact of the capital ratio within different regions on distribution strategies motivated this study. In addition, the majority of studies on predictors of choice between distribution strategies have ignored the dual and the no distribution policy alternatives relative to share repurchases.Research approach/design and method: all the data used in this research were sourced from the Iress data bases. The research employed an advanced panel threshold regression estimation and a multinomial logistic regression (pooled and fixed effects using the generalised structural equation model).Main findings: Firstly, over the period 1990–2017 the empirical results revealed the existence of a single threshold effect between the debt-to-equity ratio and the dividend payments, and a double threshold effect between the total debt based on the book value and the dividend payment. Secondly, the choice between distribution strategies was driven by company specific attributes.Practical/managerial implication: These findings provide useful insights to South African managers for formulating and maximizing pay-out decisions.Contribution/value-add: The study contributes to the scant body of knowledge on the effect of threshold capital ratio and company specific attributes on distribution strategies.

The Effect of Earnings Management on Dividend Policy in Pakistan

2017 ◽  
Vol 9 (1-3) ◽  
Author(s):  
Faiza Saleem ◽  
Mohd Norfian Alifiah
Keyword(s):  
Earnings Management ◽  
Dividend Policy ◽  
Oil And Gas ◽  
Stock Exchange ◽  
Annual Data ◽  
Cross Sectional ◽  
Return On Equity ◽  
Dividend Payments ◽  
Oil And Gas Companies ◽  
The Impact

The aim of this study was to find out the impact of earnings management on dividend policy of oil and gas companies listed at the Karachi stock exchange. The study uses annual data of oil and gas companies for the period from 2008 to 2015. The dependent and independent variables are dividend policy and earnings management and the three control variables are leverage, return on equity and firm size. Modified cross sectional Jones model (1995) was used for calculating discretionary accruals which has been used as proxy for earnings management whereas measurement of dividend policy has been proxy by dividend payout. The findings from regression analysis indicate that earnings management has insignificant relationship with dividend policy of selected firms in Pakistan. Financial crisis in the world and economic decline period are the main reasons of this relationship. In the decline period the firms try to increase manipulation in earnings as a result the company starts reducing dividend payments. It is concluded that there are some other factors that may influence the pattern of dividend payment in the firms.

scholarly journals The Impact of Dividend Policy on Stock Price Volatility in Pakistan

2019 ◽  
Vol IV (I) ◽  
pp. 506-515
Author(s):  
Ziaullah Shah ◽  
Shehzad Khan ◽  
Muhammad Faizan Malik
Keyword(s):  
Panel Data ◽  
Stock Price ◽  
Dividend Policy ◽  
Price Volatility ◽  
Fixed Effect Model ◽  
Share Prices ◽  
Dividend Payments ◽  
Effect Model ◽  
Dividend Irrelevance ◽  
The Impact

The objective of this study is to inspect dividend policy influence on volatility of share prices. For investigation seven Non-financial segment/sectors have been selected. A sample of 137 firms who paid four dividend payments listed at PSX is analysed for the period of 2007-2017.Proxy for policy of dividend are earning per share, Payout ratio, dividend yield, while assets growth and firm size are taken as control variables. OLS regression model has been initially applied on panel data. The outcomes of fixed effect model are focused. Overall outcomes of the study confirmed that prices of stock is significantly influenced by policy of dividend and reject dividend irrelevance theory.

scholarly journals The Impact of Legal Systems on Dividend Payments

2021 ◽  
Vol 16 (1) ◽  
pp. 5-11
Author(s):  
Albi Alikaj ◽  
Aditya Limaye
Keyword(s):  
Legal System ◽  
Significant Relationship ◽  
Individual Factors ◽  
Legal Systems ◽  
Minority Shareholders ◽  
Factors Affecting ◽  
Shareholder Protection ◽  
Dividend Payments ◽  
Percentage Share ◽  
The Impact

Abstract This paper focuses on the amount of dividends paid to shareholders by companies in different countries and examines whether being in a country where the legal system offers weak shareholder protection affects dividend payments distributed to shareholders. The sample used for this study comprises 8,045 companies from 46 countries. Seven individual factors affecting shareholder protection were examined. Out of the seven factors, only two of them provide a significant relationship with dividend payments, and more specifically, the mechanisms put in place by companies to protect oppressed minority shareholders as well as minimum percentage share of capital in order for the shareholders to be eligible to call an extraordinary shareholder meeting.

scholarly journals Dividend tax, dividend payments and share values: a South African perspective

2014 ◽  
Vol 11 (3) ◽  
pp. 242-252 ◽  
Author(s):  
Me Stéfani Coetzee ◽  
Johannes de Wet
Keyword(s):  
South African ◽  
Share Price ◽  
Dividend Payment ◽  
Share Prices ◽  
Study Approach ◽  
Dividend Payments ◽  
African Perspective ◽  
The Impact ◽  
Dividend Tax ◽  
Payment Policies

The study investigates the impact of changes in dividend taxes on dividend payment policies and in turn, the impact of dividend payments on share prices. An event study approach is used to analyse the share price movements before, on and after dividend announcement dates. The results for companies of which the dividend paid resulted in an increase in the dividend payout ratio were that share prices responded positively to the announcement on the announcement date and for the few days thereafter. The findings again underline the paradoxical nature of dividends and although a better understanding of the impact of dividends on South African companies was gained, the dividend puzzle remains largely unsolved.

scholarly journals The Impact Of Dividend Payments On Shareholders Wealth: Evidence From The Vector Error Correction Model

2013 ◽  
Vol 12 (11) ◽  
pp. 1451 ◽  
Author(s):  
Johannes De Wet ◽  
Mvita Mpinda
Keyword(s):  
Error Correction ◽  
Market Price ◽  
Error Correction Model ◽  
Vector Error Correction Model ◽  
Correction Model ◽  
Vector Error Correction ◽  
Dividend Payments ◽  
Vector Error ◽  
Long Run ◽  
The Impact

To date, a vast body of research has been established on dividend policy. However, little research has been done on the impact of dividend payments on shareholders wealth while considering the short- and long-run effects. This study is based on a sample of 46 companies listed on the Johannesburg Securities Exchange (JSE) for the period 1995 to 2010. The Vector Error Correction Model (VECM) was used to describe the short-run and long-run dynamics or the adjustment of the co-integrated variables toward their equilibrium values. Results indicate that in the long run, dividend yield is positively related to market price per share, while earnings per share do not have a significant impact on the market price per share.

scholarly journals The Impact of Ownership on the Structures Based on Division Between Policies and Companies

2018 ◽  
pp. 272-276
Keyword(s):  
Growth Factors ◽  
Regression Models ◽  
Software Environment ◽  
Public Companies ◽  
Agency Conflict ◽  
Empirical Estimates ◽  
Dividend Payments ◽  
Methodical Approach ◽  
Factor Regression ◽  
The Impact

The article reflects the features of dividend payments in large domestic companies. This implies the need to use econometric models to measure the quantitative and qualitative economic interrelationships of dividend payments and their growth factors. The result of the study is a methodical approach to assessing the growth factors of dividend payments based on linear multi-factor regression models. The authors propose the construction of a linear multi-factor regression in the Gretl software environment in order to identify the relationship between dividend payments and growth factors based on specific economic data. The study confirmed the hypothesis about the problem of agency conflict and payment of lower dividends in the conditions of concentration of shares in the hands of the majority owner. The empirical estimates of the parameters of the regression models presented in the article argued the hypothesis that public companies, which have a state as a majority shareholder send a smaller share of net profit to pay dividends than private companies, and an increase in borrowed funds in the company’s capital structure leads to a decrease in dividend payments. However, the hypothesis of a direct relationship between the size of the company and the size of dividend payments was rejected. This can be explained by the fact that the sample includes the largest Russian companies with a majority owner. In the future, researchers can perform more detailed measurements of the determinants of dividend policy, taking into account branch-wise and sectoral features of the economy.

scholarly journals On the Impact of Dividend Payments on Stock Prices - an Empirical Analysis of the German Stock Market

2021 ◽  
Vol 16 (1) ◽  
pp. 255-269
Author(s):  
Konstantin Melching ◽  
Tristan Nguyen
Keyword(s):  
Stock Prices ◽  
Stock Price ◽  
Signaling Theory ◽  
Share Price ◽  
Dividend Payment ◽  
Share Prices ◽  
Dividend Payments ◽  
Time Period ◽  
German Stock ◽  
The Impact

Abstract This paper examines the relation between dividend payments and stock prices of all firms in the German prime standard DAX 30 in the time period from 2012 to 2019. The irrelevance theory introduced by Miller and Modigliani states that dividend payments must not have an impact on stock prices in a perfect market. In contrast, the signaling theory and the dividend puzzle indicate that dividend payments are likely to have a profound impact on the stock price. According to our findings the ex-dividend decrease of stock prices was significantly smaller than the dividend payment. Nevertheless, the results support the impact of the dividend payment on the share price. Firstly, the existence of the ex-dividend markdown is a proof that dividend payments cause share price losses. Secondly, the study explains in particular that high dividend payments result in high share prices over the examined period. Thirdly, our analysis demonstrates a positive correlation between the dividend and the stock price development according to the signaling theory. Considering the above- mentioned results, we can conclude that the share price of a company is highly affected by the decision making of the company regarding the dividend policy.

scholarly journals The impact of the corporate governance quality on the dividend policy of companies in the BRICS countries

2021 ◽  
Vol 2 (2) ◽  
pp. 84-106
Author(s):  
Maria Khamidullina ◽  
Svetlana Makarova
Keyword(s):  
Corporate Governance ◽  
Fixed Effects ◽  
Dividend Policy ◽  
Poor Quality ◽  
Public Corporations ◽  
Brics Countries ◽  
Dividend Payments ◽  
Corporate Governance Quality ◽  
The Impact

The article presents the results of a study aimed at determining the nature of the influence of the quality of corporate governance on the dividend policy pursued by companies in the BRICS countries. This relationship is determined based on empirical research on a sample of 122 large public corporations of the BRICS countries (based on 610 observations) for the period from 2015 to 2019. The study uses Tobit, random effects, fixed effects, and OLS. The results of this study show that the quality of corporate governance significantly negatively correlates with dividend payments of companies. This means that companies in the BRICS countries adhere to the dividend substitution model (proposed by La Porta), or, in other words, compensate for the poor quality of corporate governance with high dividend payments. Taking into account the results of the study, in the final part of the article, the main methods of improving the quality of corporate governance are proposed, which can contribute to increasing the value of companies in the BRICS countries.

scholarly journals The Theoretical Impact Of The Listing Of Syariah-Approved Stocks On Stock Price And Trading Volume

2010 ◽  
Vol 9 (3) ◽  
Author(s):  
Carl B. McGowan, Jr. ◽  
Junaina Muhammad
Keyword(s):  
Stock Price ◽  
Trading Volume ◽  
Selection Criteria ◽  
Advisory Council ◽  
Kuala Lumpur ◽  
Security Issue ◽  
Dividend Payments ◽  
Public Announcements ◽  
Financial Soundness ◽  
The Impact

The stock price and trading volume reactions of companies to single events, such as public announcements on mergers, dividend payments, or security issue announcements have been studied extensively.  The impact of news about a continuing event such as the news on the inclusion in and exclusion of stocks from the KLSE Syariah Index that occurs twice yearly affects security prices and trading volume.  This paper examines reasons that price and trading volume of Syariah-approved stocks might react to the inclusion-exclusion exercise.  The selection criteria set by the Syariah Advisory Council of Securities Commission of Malaysia in updating the list of the Syariah-approved stocks is not based on the financial soundness alone.  Views from Syariah perspective and from financial theories are discussed to support the behavior of the included and excluded stocks from the Kuala Lumpur Syariah Index.

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