scholarly journals Determinants of Dividend Payout Ratio: Evidence from Indian Companies

2015 ◽  
Vol 5 (2) ◽  
pp. 217 ◽  
Author(s):  
Nishant B. Labhane ◽  
Ramesh Chandra Das
Keyword(s):  
Cash Flow ◽  
Manufacturing Industry ◽  
Stock Exchange ◽  
Free Cash Flow ◽  
Entire Period ◽  
Business Risk ◽  
Dividend Payout ◽  
Tax Rate ◽  
Dividend Distribution ◽  
High Investment

<p class="ber"><span lang="EN-GB">The present study analyzes the trend and determinants of dividend payout ratio of National Stock Exchange (NSE) listed companies in India. The study is based on 239 companies, which have continuous data during the period 1994-95 to 2012-13. From the trend analysis we find that the number of dividend paying companies has declined but the average dividend paid by them has increased manifold over the last two decades which suggests that the dividend paying companies have paid higher amounts of dividends in the later years. The dividend payout ratio varies across all the industries with the electricity industry having the lowest payout ratio and the miscellaneous manufacturing industry having the highest payout ratio. The empirical results suggest that firms with high free cash flow, firms which are larger, more profitable and mature, pay more dividends while riskier, more leveraged and firms with high investment opportunities tend to pay lower dividends. The dividend distribution tax rate imposed by government affects the dividend payout ratio positively. The market-to-book ratio, debt-to-equity ratio, free cash flow, business risk, age, size, profitability and dividend distribution tax variables are significant for the entire period of study. Whereas, the business risk, profitability and dividend distribution tax variables are significant for the entire period of study i.e. 1995-2013 as well as for the two sub-periods 1995-2003 and 2004-2013. Overall, the results are consistent with the pecking order, transaction cost, signaling and firm life cycle theory of dividend policy and we find a little evidence for agency costs theory.</span></p>

scholarly journals Dividend Policy Decisions in India: Standalone Versus Business Group-Affiliated Firms

2018 ◽  
Vol 20 (1) ◽  
pp. 133-150 ◽  
Author(s):  
Nishant B. Labhane
Keyword(s):  
Dividend Policy ◽  
Stock Exchange ◽  
Business Groups ◽  
Business Group ◽  
Business Risk ◽  
Policy Decisions ◽  
Financial Leverage ◽  
Dividend Payout ◽  
Investment Opportunities ◽  
High Investment

This study examines the determinants of two important dividend policy decisions specifically the dividend payment decision and the dividend payout level decision of 781 sample Indian firms enlisted on National Stock Exchange (NSE) over the period, 1995–2015, comparing the business group-affiliated firms with the standalone firms. In term of characteristics, the business group-affiliated firms are larger, more profitable and more levered than the standalone firms. The empirical results suggest that the dividend policy decisions of business group-affiliated firms differ significantly from that of the standalone firms. In the case of standalone firms, the firms with high investment opportunities, high financial leverage and high business risk are less likely to pay dividends, and their dividend payout levels are lower. On the other hand, the firms affiliated with business groups are more likely to pay dividends, and their dividend payout levels are higher even when they have high investment opportunities, high financial leverage and high business risk. Overall, the findings suggest that although the business groups are able to create internal capital markets (ICMs) and shield their member firms from market imperfections, they may suffer from other information asymmetry problems.

scholarly journals Return on Asset dan Investment Opportunity Set dalam Memprediksi Dividend Payout Ratio Perusahaan Manufaktur Sektor Consumer Goods

2021 ◽  
Vol 4 (1) ◽  
pp. 13-22
Author(s):  
Moch Fathony
Keyword(s):  
Consumer Goods ◽  
Stock Exchange ◽  
Secondary Data ◽  
Return On Assets ◽  
Dividend Payout ◽  
Investment Opportunity Set ◽  
Investment Opportunities ◽  
Dividend Distribution ◽  
High Investment ◽  
A Company

Among factors that may be instrumental in affecting the dividend payout decision, this study aims to determine the effect of return on assets (ROA) and investment opportunities on dividend distribution in a company. Using secondary data from 10 Consumer Goods companies listed on the Stock Exchange in the period 2015 - 2019, the data were analyzed using panel regression using EVIEWS. This study found that ROA and investment opportunities can predict the Dividend Payout Ratio in the Consumer Goods Industry. The results suggest that the more profitable a company is, the more likely it is to pay high dividends. Also, high investment opportunities are good position increases a firm's ability to pay dividends.

scholarly journals THE EFFECTS OF LIFE CYCLE AND FREE CASH FLOW ON DIVIDEND OF AGRICULTURAL COMPANIES THAT LISTED IN INDONESIA STOCK EXCHANGE

2020 ◽  
Vol 9 (2) ◽  
pp. 121
Author(s):  
Helma Malini ◽  
Venu Fitratama
Keyword(s):  
Life Cycle ◽  
Cash Flow ◽  
Firm Size ◽  
Negative Impact ◽  
Stock Exchange ◽  
Free Cash Flow ◽  
Investment Opportunity ◽  
Dividend Payout ◽  
Independent Variables ◽  
Investment Opportunity Set

Company decision to give profits to their investors is based on several reasons including internal policy from the company. Therefore, this study discusses the effects of life cycle and free cash flow on dividend of agricultural companies that listed in Indonesia stock exchange. Independent variables; used are free cash flow, life cycle, firm size, leverage, assets growth, and investment opportunity set. The population in this study is Agricultural company listed on Indonesia Stock Exchange (BEI) in the period of 2015 - 2018. The sample collected using purposive sampling methods. Total of 21 companies were determined as samples. The method of analysis in this study is panel data regression with basis on fixed effect model. The result of this study indicate that the independent variables of free cashflow, life cycle, firm size, leverage, and investment opportunity set have positive impact toward dividend payout ratio while assets growth has negative impact on dividend payout ratio. The result of determination coefficient shows that the independent variables give affect 63.69% against dependent variable.Keywords: Free cash flow, Life cycle, Firm size, Leverage, Assets growth, Investment opportunity set, Dividend payout ratio, Dividend policy

Pengaruh Free Cash Flow, Operating Cash Flow, dan Dividend Payout Ratio Terhadap Nilai Perusahaan

2018 ◽  
Vol 10 (1) ◽  
pp. 52-65
Author(s):  
Suwaldiman Suwaldiman
Keyword(s):  
Cash Flow ◽  
Firm Value ◽  
Stock Exchange ◽  
Linear Regression Analysis ◽  
Multiple Linear Regression Analysis ◽  
Free Cash Flow ◽  
Manufacturing Companies ◽  
Dividend Payout ◽  
Operating Cash Flow ◽  
The Impact

            This research examines the impact of free cash flow, operating cash flow, and dividend payout ratio on the firm value which is represented by stock return.             This research employees a multiple linear regression analysis to test the hypothesis. Samples used in this research are 159 manufacturing companies registered in Indonesia Stock Exchange for the period of 2013, 2014, and 2015.             This research reveals that free cash flow and operating cash flow have no significant impact on the firm value. Those variables seem having no important contents in the point of view of investors. Therefore they do not response to the information. However, this research proves that dividend payout ratio have significant impact on the firm value. It can be concluded that dividend payout ratio is more important than those of free cash flow and operating cash flow. Investors will positively response to the dividend information and it will significantly increase the firm value.

PENGARUH UKURAN PERUSAHAAN, PROFITABILITAS DAN RESIKO BISNIS TERHADAP KEBIJAKAN HUTANG

Equity ◽  
2016 ◽  
Vol 19 (2) ◽  
pp. 163
Author(s):  
Refdatul Husna ◽  
Wahyudi Wahyudi
Keyword(s):  
Firm Size ◽  
Manufacturing Industry ◽  
Stock Exchange ◽  
Free Cash Flow ◽  
Managerial Ownership ◽  
Business Risk ◽  
Financial Report ◽  
Tax Shield ◽  
Analysis Technique ◽  
Debt Policy

The purpose of this study was to examine the influence of Firm Size, Profitability and Business Risk on Debt Policy of companies manufacturing industry consumption listed in Indonesian Stock Exchange for the period from 2012 to 2014. The population in this study amounted to 37 companies which are all companies manufacturing industry consumption listed in Indonesian Stock Exchange during the period 2012 to 2014. The sample used in this study is a companies that meets the criteria as set out in this study to obtain 28 companies. The data obtained derived from the annual report and financial report of the banks published. The analysis technique used in this research is multiple linear regression to test the classical assumption first. The result showed that the Firm Size is not significantly effects on Debt Policy. While Profitability and Business Risk have a significant influence on Debt Policy. The ability of independent variables (Firm Size, Profitabilty and Business Risk) in explaining the dependent variable (Debt Policy) is 13,9%. The remaining 86,1% is explained by variable such as Non-debt Tax Shield, Tangilibity, Institusional Ownership, Free Cash Flow, Asse Structure, Managerial Ownership and Dividend Policy.

scholarly journals PENGARUH FREE CASH FLOW, PERTUMBUHAN PERUSAHAAN, RETURN ON ASSETS, CASH RATIO, DEBT TO EQUITY RATIO DAN FIRM SIZE TERHADAP KEBIJAKAN DIVIDEN (Studi Empiris pada Perusahaan Sektor Industri Barang Konsumsi yang Terdaftar di Bursa Efek Indonesia Periode 2015

2020 ◽  
Vol 12 (1) ◽  
pp. 44-67
Author(s):  
Elisa Tjhoa
Keyword(s):  
Cash Flow ◽  
Firm Size ◽  
Stock Exchange ◽  
Secondary Data ◽  
Free Cash Flow ◽  
Return On Assets ◽  
Dividend Payout ◽  
Regression Methods ◽  
Negative Effect ◽  
Equity Ratio

Abstract- The company’s decision on the distribution of dividend, as one of the returns expected by investors aside of capital gain, is an important decision due to its impacts on company’s value and shareholders’ wealth. The purpose of this research is to obtain empirical evidence regarding the determinants on Dividend Payout Ratio, namely Free Cash Flow, Company’s Growth, Return on Assets, Cash Ratio, Debt to Equity Ratio, and Firm Size (Empirical Study on Consumption Goods Industry Companies Listed on Indonesia Stock Exchange between 2015-2017). The samples in this study were selected through purposive sampling method and secondary data were analyzed through multiple linear regression methods. In total, 13 companies were used as samples. The result of this study showed Free Cash Flow, Cash Ratio and Firm Size partially have significant and positive effect towards Dividend Payout Ratio, and Company’s Growth has significant and negative effect towards Dividend Payout Ratio. While Return on Assets and Debt to Equity Ratio has no significant effects toward Dividend Payout Ratio.  Free Cash Flow, Company’s Growth, Return on Assets, Cash Ratio, Debt to Equity Ratio and Firm Size simultaneously have significant effect toward Dividend Payout Ratio (DPR).   Keywords: Cash Ratio, Debt to Equity Ratio, Dividend Payout Ratio, Firm Size, Free Cash Flow, Growth, Return on Assets

scholarly journals The Role of Dividend Payout in the Determination of the Relationship Between Earnings Before Interest and Tax Cash Flow From Operations, Capital Expenditures and Firm Sustainable Cash Flows: A Case Of Non-Financial Firms

2018 ◽  
pp. 382-390
Keyword(s):  
Cash Flow ◽  
Stock Exchange ◽  
Predictive Ability ◽  
Cash Flows ◽  
Free Cash Flow ◽  
Capital Expenditures ◽  
Dividend Payout ◽  
Financial Firms ◽  
Free Cash Flows

The prime objective of the current study is to determine the predictive ability to earnings before interest and tax, cash flow from operations, dividend payout, and capital expenditures for free cash flows. In addition to the current study is also intended to highlight the moderating role of dividend payout predictive ability to earnings before interest and tax, cash flow from operations, and capital expenditures for free cash flows. To achieve the objective of the study the data of 100 listed non-financial firms are collected from the annual report of the firms listed on the Iraq Stock Exchange. The data is collected over a period of six years from 2012-2017. To achieve the first set of objective regarding the direct results we have chosen OLS as a final statistical test after undergoing basic diagnostic analysis. To achieve the second set of objectives regarding the indirect effect of dividend payout, we have used the hierarchical multiple regression models.The statistical software, STATA is used for the analysis purpose. The findings of the study have shown a great deal of agreement with hypothesized results and also provided support to the pecking order theory and theory of free cash flow. The findings of the study will be helpful for policymakers, investors, scholars, and students in understanding the key factors which affect the free cash flow decisions and determine its predictability.

Effect of Leverage on Firm Market Value and How Contextual Variables Influence this Relationship

2014 ◽  
Vol 17 (01) ◽  
pp. 1450004 ◽  
Author(s):  
Ming-Chang Cheng ◽  
Zuwei-Ching Tzeng
Keyword(s):  
Cash Flow ◽  
Firm Value ◽  
Stock Exchange ◽  
Negative Influence ◽  
Positive Influence ◽  
Free Cash Flow ◽  
Least Square ◽  
Contextual Variables ◽  
Tax Rate ◽  
Market Values

Using the financial data from 645 companies that were listed in the Taiwan Stock Exchange (TSE) between 2000 and 2009, this paper applied a least square dummy variable (LSDV) model to estimate the effect of leverage on firm market values and examine how contextual variables influence this relationship. The empirical results are as follows. First, the values of leveraged firms are greater than the values of unleveraged firms if we do not consider the probability of bankruptcy. If we simultaneously consider the benefits and costs of debt, we find that leverage is positively related to the firm value until a firm has issued sufficient debt to attain its optimal capital structure. Second, the positive influence of leverage on the firm value tends to be stronger for firms of higher financial quality (firms with greater Z-scores), firms with greater growth opportunities and firms with higher corporate tax rates. Third, the negative influence of leverage on firm value tends to be strengthened if increases occur in a firm's free cash flow, a firm's non-debt tax rate, or the inflation rate it experiences. Finally, leverage may also have a positive effect on firm value provided that a firm with a higher free cash flow, a higher corporate rate or a higher inflation, is able to properly capitalize on the resultant opportunities. These findings provide insight into firms' debt financing decisions, helping firms to maximize their values.

scholarly journals THE INFLUENCE OF DIVIDEND PAYOUT RATIO AND FREE CASH FLOW TO DEBT TO EQUITY RATIO

2017 ◽  
Vol 8 (1) ◽  
pp. 23
Author(s):  
Yurizki Wida Hapsari ◽  
Isharijadi Isharijadi ◽  
Purweni Widhianningrum
Keyword(s):  
Cash Flow ◽  
Stock Exchange ◽  
Linear Regression Analysis ◽  
Sampling Technique ◽  
Multiple Linear Regression Analysis ◽  
Free Cash Flow ◽  
Manufacturing Companies ◽  
Dividend Payout ◽  
Analytical Technique ◽  
Dividend Payments

<p>This study aimed to analyze the effect of dividend payout ratio and free cash flow to the debt to equity at the manufacturing companies which listed in the Indonesia Stock Exchange. The population of this study is manufacturing companies which listed in Indonesia Stock Exchange during the year 2010, 2011, 2012, and 2013 a number of 128 companies. Purposive sampling is used for sampling technique, as many as 33 companies. Data analytical technique in the study is multiple linear regression analysis. The results of this study proved that the dividend payout ratio had significant negative effect on the debt to equity. It showed that the dividend payments appeared as a substitute for debt in the capital structure at the company. Free cash flow positively and significantly influenced debt to equity. It was due to the investment in working capital of the company was greater than the company's operating cash flow.<em></em></p>

scholarly journals PENGARUH DIVIDEND PAYOUT RATIO DAN LEVERAGE TERHADAP FREE CASH FLOW

2018 ◽  
Vol 2 (2) ◽  
pp. 194-205
Author(s):  
Titin Sumarni ◽  
Ely Kartikaningdyah
Keyword(s):  
Cash Flow ◽  
Firm Size ◽  
Quantitative Methods ◽  
Stock Exchange ◽  
Free Cash Flow ◽  
Dividend Payout ◽  
Purposive Sampling ◽  
Funding Sources ◽  
Financial Company ◽  
A Company

Abstrak Penelitian ini bertujuan untuk mengetahui pengaruh dividend payout ratio dan leverage terhadap free cash flow perusahaan pada perusahaan non-keuangan di Bursa Efek Indonesia (BEI) periode tahun 2010-2016. Arus kas bebas perusahaan diukur dengan menggunakan free cash flow sebagai variabel dependennya, dividend per share, leverage dan longterm leverage sebagai variabel independennya serta firm size untuk variabel kontrolnya. Metode penelitian menggunakan pendekatan metode kuantitatif. Penarikan sampel penelitian menggunakan metode purposive sampling yang mendapatkan hasil 357 sampel perusahaan non keuangan, dan data yang digunakan adalah data panel. Hasil penelitian ini menunjukkan bahwa Dividend Payout Ratio tidak berpengaruh terhadap FCF, Leverage berpengaruh terhadap FCF dan Longterm Leverage tidak berpengaruh terhadap FCF. Penelitian selanjutnya diharapkan untuk menambah sampel pada sektor yang lain dan menambah variabel lain seperti profitabilitas yang diukur dengan ROCE, ROA dan ROI. Penelitian ini dapat dijadikan acuan perusahaan untuk dapat meningkatkan arus kas bebasnya karena dari tingginya arus kas bebas bisa dianalisa bagaimana sebuah perusahaan memanfaatkan kas yang bisa digunakan untuk mengembangkan usaha atau mengambil dana dari hutang dan sumber dana lainnya.   Kata kunci: arus kas bebas, leverage, dividend per share   Abstract This study aims to know the influence of the dividend payout ratio and leverage against the free cash flow the company on a non-financial company on the Indonesia stock exchange (IDX) period in 2010-2016. Free cash flow the company is measured by using free cash flow as the dependennya variable, dividend per share, leverage and leverage its independent variables as longterm as well as firm size for the variable control. The method research of using quantitative methods approach. Withdrawal of samples of research using the method of purposive sampling that gets results 357 samples non financial companies, and data is the data panel. The results of this research show that the Dividend Payout Ratio has no effect against the FCF, Leverage effect on FCF and Longterm Leverage has no effect on FCF . Further research is expected to add the samples on other sectors and adds other variables such as profitability as measured by ROCE, ROA and ROI. This research is referable to the company can increase its free cash flow because of the high free cash flow can be analyzed how a company utilizing the cash that can be used to develop the venture or taking funds from debt and other funding sources.   Key Words: free cash flow, leverage, dividend per share

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