A Diagnosis of the Determinants of Dividend Payout Policy in India

2014 ◽  
pp. 1202-1211
Author(s):  
Raj Kumar ◽  
Pawan Kumar Jha
Keyword(s):  
Corporate Finance ◽  
Cash Flow ◽  
Stock Exchange ◽  
Payout Policy ◽  
Analytical Tool ◽  
Critical Factors ◽  
Dividend Payout ◽  
Earnings Per Share ◽  
Retained Earnings ◽  
Dividend Tax

Dividend decision involves the portion of a firm's net earnings that are paid out to the shareholders, and the remaining is ploughed back in the company for its growth purpose. Despite comprehensive theoretical and empirical explanations, dividend policy and its determinants are a puzzle to be fixed in corporate finance. This chapter is an attempt to assess the dynamics and determinants of dividend-payout policy using a factor analytical tool and a multiple regression analysis as a supportive tool. The authors take into account the sample of ten automobile companies based on Market Capitalization listed on the Bombay Stock Exchange (BSE) for a period of 10 years from 2002-2003 to 2012-2013. The results of the factor analysis show that six factors, current ratio, cash flow, retained earnings per share, earnings per share, equity dividend, and corporate dividend tax, are identified as the most critical factors determining dividend payout in Indian automobile companies. However, regression results depict only three factors (i.e. cash flow, equity dividend, and corporate dividend tax) have been found statistically significant in determining dividend payout policy.

A Diagnosis of the Determinants of Dividend Payout Policy in India

2014 ◽  
pp. 46-55
Author(s):  
Rajesh Kumar ◽  
Pawan Kumar Jha
Keyword(s):  
Corporate Finance ◽  
Cash Flow ◽  
Stock Exchange ◽  
Payout Policy ◽  
Analytical Tool ◽  
Critical Factors ◽  
Dividend Payout ◽  
Earnings Per Share ◽  
Retained Earnings ◽  
Dividend Tax

Dividend decision involves the portion of a firm's net earnings that are paid out to the shareholders, and the remaining is ploughed back in the company for its growth purpose. Despite comprehensive theoretical and empirical explanations, dividend policy and its determinants are a puzzle to be fixed in corporate finance. This chapter is an attempt to assess the dynamics and determinants of dividend-payout policy using a factor analytical tool and a multiple regression analysis as a supportive tool. The authors take into account the sample of ten automobile companies based on Market Capitalization listed on the Bombay Stock Exchange (BSE) for a period of 10 years from 2002-2003 to 2012-2013. The results of the factor analysis show that six factors, current ratio, cash flow, retained earnings per share, earnings per share, equity dividend, and corporate dividend tax, are identified as the most critical factors determining dividend payout in Indian automobile companies. However, regression results depict only three factors (i.e. cash flow, equity dividend, and corporate dividend tax) have been found statistically significant in determining dividend payout policy.

scholarly journals The Role Of Cash Holdings, Working Capital, Dividend Payout On Capital Investment

2018 ◽  
Vol 34 (3) ◽  
pp. 419-426
Author(s):  
Andrew Chan
Keyword(s):  
Cash Flow ◽  
Firm Value ◽  
Capital Investment ◽  
Stock Exchange ◽  
Cash Holdings ◽  
Payout Policy ◽  
Working Capital ◽  
Dividend Payout ◽  
Investment Spending ◽  
The Relationship

An objective of this paper is to investigate the relationship between firms' capital investment spending, cash holdings, and working capital in an expanding Asian financial market.  A sample of publicly traded manufacturing firms on the Hong Kong Stock Exchange was examined during the period 2005-2014. The empirical results provide strong and statistically significant evidence on the effect of cash flow on investment.  Working capital also exhibits significant relationship with capital investment spending, though the relationship is not as strong and significant as that with cash flow and cash holding.  Firms with low dividend payout policy over the sample period depended heavily on cash flow, changes in cash flow and, to a lesser extent, on working capital to finance spending on fixed plant and equipment.  These results suggest that the effect of capital investment spending financed by internal cash flow on firm value may depend on a firm's dividend payout.

scholarly journals DETERMINANTS OF DIVIDEND PAYOUT RATIO: A STUDY OF KSE MANUFACTURING FIRMS IN PAKISTAN

2017 ◽  
Vol 13 (1) ◽  
pp. 12-24
Author(s):  
Rehab Khan ◽  
Keyword(s):  
Cash Flow ◽  
Stock Exchange ◽  
Payout Policy ◽  
Manufacturing Firms ◽  
Cement Industry ◽  
Panel Regression ◽  
Sales Growth ◽  
Significant Relation ◽  
Dividend Payout ◽  
Independent Variable

Purpose- Motive and cause of this study is pursuing to examine the determinants of dividend payout ratios of KSE listed companies in Pakistan. Design- This study used the data of ten sectors of cement industry and these companies are listed in Karachi stock exchange, and data is drives by 2003-2012, enlarge the current research on dividend payout policy. Panel regression model used to estimate the results. Corporate profitability has always been considered as a leading independent variable of dividend payout ratio. Findings- There are multitudinal factors other than corporate profitability that influence dividend decisions of the firm like taxes, cash flow and debt to equity, sales growth. This research analyzes that profitability, tax, and cash flow have a significant relation with dividend payout ratio. And debt to equity and sales growth has insignificant relationship with dividend payout ratio. Research Limitations- This research failed to collect the data of different sectors listed on KSE except Cement industry. And collect the data of only one sector (cement). There are other determinants exist that have a huge effect on payout ratio, than these which are included in the research.

scholarly journals Pengaruh ROE, EPS, OCF, Size, DER, CR dan Growth Terhadap Kebijakan Dividen Pada Perusahaan Manufaktur di Bursa Efek Indonesia (BEI)

2019 ◽  
Vol 14 (2) ◽  
pp. 80-94
Author(s):  
Crystha Armereo ◽  
Pipit Fitri Rahayu
Keyword(s):  
Cash Flow ◽  
Stock Exchange ◽  
Regression Result ◽  
Manufacturing Companies ◽  
Current Ratio ◽  
Dividend Payout ◽  
Return On Equity ◽  
Earnings Per Share ◽  
Equity Ratio ◽  
Operating Cash Flow

The objective of this research is to identify the influence of return on equity, earnings per share, operating cash flow, size, debt to equity ratio, current ratio, and growth to dividend payout. Data collected from manufacturing companies that listed on Indonesian Stock Exchange for three years period 2014 to 2016. Sample selected by using purposive sampling method. There are 38 companies meet the criteria and used as sample. The statistical method used in this research is multiple regression. Result of this research showed that return on equity, earnings per share, and growth have influence dividend payout but operating cash flow, size, debt to equity ratio, and current ratio have no influence towards dividend policy.

scholarly journals PENGARUH EARNING PER SHARE, PRICE TO BOOK VALUE, CASH FLOW OPERATING, STOCK RETURN, DIVIDEND PAYOUT RATIOTERHADAP PENILAIAN EKUITAS PERUSAHAAN

2018 ◽  
Vol 20 (3) ◽  
pp. 428
Author(s):  
Sharen Santoso Rafli, Yanti
Keyword(s):  
Interest Rates ◽  
Cash Flow ◽  
Significant Influence ◽  
Stock Return ◽  
Share Price ◽  
Equity Valuation ◽  
Dividend Payout ◽  
Book Value ◽  
Earnings Per Share ◽  
Retained Earnings

The purposeof this studyis to analyze the effect of Earnings Per Share, Price to Book Value, Cash Flow Operating, Stock Return, Dividend Payout Ratio to theEquity Valuation oncompanies listedinthe Indonesia Stock Exchange. A total sample of 47 manufacturing company was selected through purposive sampling method. The results of this study is the earnings per share, dividend payout ratio, and operating cash flow do not have significant influence on equity valuation. Conversely, the price-to-book value and stock return       have  significant influence on equity valuation. Suggestions for future research is to expand the period of research and use others independent variables that have not been tested in this study for example: sales, interest rates, retained earnings, stock price, and net income.

scholarly journals DETERMINANTS OF DIVIDEND PAYOUT RATIO: A STUDY OF KSE MANUFACTURING FIRMS IN PAKISTAN

2017 ◽  
Vol 13 (1) ◽  
pp. 12-24
Author(s):  
Rehab Khan ◽  
Keyword(s):  
Cash Flow ◽  
Stock Exchange ◽  
Payout Policy ◽  
Manufacturing Firms ◽  
Cement Industry ◽  
Panel Regression ◽  
Sales Growth ◽  
Significant Relation ◽  
Dividend Payout ◽  
Independent Variable

Purpose- Motive and cause of this study is pursuing to examine the determinants of dividend payout ratios of KSE listed companies in Pakistan. Design- This study used the data of ten sectors of cement industry and these companies are listed in Karachi stock exchange, and data is drives by 2003-2012, enlarge the current research on dividend payout policy. Panel regression model used to estimate the results. Corporate profitability has always been considered as a leading independent variable of dividend payout ratio. Findings- There are multitudinal factors other than corporate profitability that influence dividend decisions of the firm like taxes, cash flow and debt to equity, sales growth. This research analyzes that profitability, tax, and cash flow have a significant relation with dividend payout ratio. And debt to equity and sales growth has insignificant relationship with dividend payout ratio. Research Limitations- This research failed to collect the data of different sectors listed on KSE except Cement industry. And collect the data of only one sector (cement). There are other determinants exist that have a huge effect on payout ratio, than these which are included in the research.

Pengaruh ROE, EPS, OCF, Size, DER, CR dan Growth Terhadap Kebijakan Dividen pada Perusahaan Manufaktur di Bursa Efek Indonesia (BEI)

2019 ◽  
Vol 14 (2) ◽  
pp. 80
Author(s):  
Crystha Armereo ◽  
Pipit Fitri Rahayu
Keyword(s):  
Cash Flow ◽  
Dividend Policy ◽  
Regression Result ◽  
Manufacturing Companies ◽  
Current Ratio ◽  
Dividend Payout ◽  
Return On Equity ◽  
Earnings Per Share ◽  
Equity Ratio ◽  
Operating Cash Flow

Abstract The objective of this research is to identify the influence of return on equity, earnings per share, operating cash flow, size, debt to equity ratio, current ratio, and growth to dividend payout. Data collected from manufacturing companies that listed on Indonesian Stock Exchange for three years period 2014 to 2016. Sample selected by using purposive sampling method. There are 38 companies meet the criteria and used as sample. The statistical method used in this research is multiple regression. Result of this research showed that return on equity, earnings per share, and growth have influence dividend payout but operating cash flow, size, debt to equity ratio, and current ratio have no influence towards dividend policy. Keywords: Dividend Policy, Return on Equity, Earnings per Share, Current Ratio,   Operating Cash Flow Size

Impact of Dividend Tax Change on the Payout Policy of Indian Companies

2019 ◽  
Vol 20 (5) ◽  
pp. 1282-1291
Author(s):  
Sanjay Dhamija ◽  
Ravinder Kumar Arora
Keyword(s):  
Negative Impact ◽  
Payout Policy ◽  
Tax Law ◽  
Dividend Payout ◽  
Inside Ownership ◽  
Regulatory Changes ◽  
Before And After ◽  
The Government ◽  
The Impact ◽  
Dividend Tax

The article examines the impact of regulatory changes in the tax on dividends on the payout policy of Indian companies. The tax law was recently amended to levy tax on dividends received by large shareholders. As the promoters group is the largest shareholder, this is expected to have a negative impact on the payout policy of companies. Furthermore, companies with larger promoter holdings have a higher motivation to reduce their payout. The study covers 370 companies present in the BSE 500 Index and compares the dividend payout of the companies before and after the introduction of tax levy. The study finds that the newly introduced tax indeed caused a shift in the dividend policy of companies, particularly those companies which have high levels of inside ownership. The findings have significant implications for companies, investors and the government.

scholarly journals Return on Equity as the Leading Indicator of Dividend Payout Ratio of Jakarta Islamic Index Stocks Listed on the Indonesia Stock Exchange

2020 ◽  
Vol 1 (3) ◽  
pp. 319-330
Author(s):  
Endi Trimawan Budianto ◽  
Eka Bertuah Eka Bertuah
Keyword(s):  
Stock Price ◽  
Dividend Policy ◽  
Stock Exchange ◽  
Cash Dividend ◽  
Dividend Payout ◽  
Return On Equity ◽  
Company Stock ◽  
Financial Condition ◽  
Main Indicator ◽  
Retained Earnings

Dividend policy is a critical and imperative decision because it involves the shareholders interest’s and has a significant impact to company's sustainability. Sartono (2010) states that dividend policy is a decision whether the profits obtained by the company will be distributed to shareholders as dividend or will be held in the form of retained earnings for future investment.Brigham and Gapenski (2006) state that investor’s main purpose when investing their fund is to gain income or return either as dividend yield or as capital gain. On the other side, the company who will share the dividend will be faced with various consideration: the urge to retain some profit for a more promising re-investment, the company funding, company liquidity, shareholder’s characteristic, specific target related to dividend payment ratio, and other factors related to dividend policy.Based on the definition mentioned above, it can be concluded that dividend policy is influenced by two conflicting interests; the shareholders interest with their dividend and the company interest to do re-investment by retaining the profit. Therefore, dividends paid will depend on each company’s considerations.In general, the shareholders wish to have a relatively stable dividend share to minimize the uncertainty of expected investment result and to increase the shareholder’s trust toward the company so that the stock value will rise. The company dividend policy can be reflected by the Dividend Payout Ratio (DPR), which is the profit percentage shared in the form of cash dividend. It means that the size of the DPR, either big or small, will affect the shareholder’s decision and to the contrary it will also affect the company financial condition. Improper decisions will potentially envisage company facing funding difficulties in the future.According to Brigham and Gapenski (2006), the optimum dividend policy is the dividend policy which creating balance between the current dividend and its growth in the future so the company stock price can be maximized.Lintner (1956) argue that the company ability to gain profit is the main indicator of the company ability to pay dividend. So, the profitability is the most determining factor toward dividend. But some other research mention that the companies tend to choose new investment instead of paying high dividend if their condition are great, well-developed and have high profitability.The rapid growth of Islamic Finance become the first-rate consideration of choosing Jakarta Islamic Index stocks as the object research in which this research aimed to improve investor’s understanding related to dividend policy of sharia stocks member of Jakarta Islamic Index.

scholarly journals Fundamental factors influencing returns of shares listed on the Johannesburg Stock Exchange in South Africa

2017 ◽  
Vol 9 (2) ◽  
pp. 426-435
Author(s):  
Marise Vermeulen
Keyword(s):  
Stock Exchange ◽  
Dividend Payout ◽  
Return On Equity ◽  
Explanatory Variables ◽  
Johannesburg Stock Exchange ◽  
Earnings Per Share ◽  
Asset Growth ◽  
Book To Market Ratio ◽  
The Impact ◽  
The Relationship

This study investigated the relationship between share returns and nine variables that had been proven to influence returns in previous research, using a multiple regression analysis. These variables are size, leverage, book-to-market ratio, earnings yield, dividend payout, earnings growth, return on equity, earnings per share and asset growth. The impact of some of the variables on share returns proved to be insignificant, and some collinearity was identified between some of the variables. However, three significant variables were identified and the final regression model included the book-to-market ratio, dividend payout and leverage as the explanatory variables.

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