Abstract
The purpose of this study is to investigate internal determinant factors of dividend policy in manufacturing firms. The study considers the impact of dividend payout ratio, signalling, earnings per share and risk on firm performance. This research also tries to create a link between dividend policy and firm performance. In the same way, the research is also aimed to create a link between these factors. Such as, the current link between the dividend policy and firm performance. It will elaborate this through current and previous studies as a whole. This study used primary data from the listed manufacturing firms in order to check the effects of dividend policy on firm performance. Data was collected from the primary source. The survey questionnaire was used to collect data from top management in order to highlight the impact of dividend policy on firm performance. Multi-regression analyses were undertaken to identify attributes that influence dividend policy. The results of the study demonstrate that all the variables are significant thus they have a positive impact on firm performance. The study established the findings that dividend payout, earning per share, signalling and risk positively and significantly influence the firm’s value. Moreover, companies should consider dividend policy in order to make the financial decision more efficiently. This study tells us that decisions about dividend policy should be made by considering other variables. The study has both practical and theoretical implication for top management in order to consider the dividend policy and its impact on firm performance.
Highlights
Dividend policy is a return to investors and is a mechanism worn to alleviate organization problems in a manufacturing company, usually through bulky possession (Useem, 1993)
This study focuses on the impact of payout ratio, signalling, earning per share and the impact of risk on firm performance (Hunjra, et al, 2011)
The main objective of the current study is to identify factors that influence dividend policy in a sample of manufacturing companies listed on Karachi Stock Exchange (KSE)
Summary
Dividend policy is a return to investors and is a mechanism worn to alleviate organization problems in a manufacturing company, usually through bulky possession (Useem, 1993). Dividend policy is one amongst the companies’ choices that area unit originated to be prejudiced by ownership structure (Jensen, 1993). When countries have deficient funds, they may route to internal and external borrow to attain unsure goals (Krugman, 1999) (financing public expenditures, preventing inflation, etc.). Dividends are often used to solve agency issues in the corporation. The corporation earns the yield to assign among stockholder what is more on an annual basis, seminally basis or quarterly basis or no dividend, it depends upon the corporate management choices. Dividend is understood as a puzzle within the field of finance for quite half a century. Ranging from the (Miller and Modigliani 1961) discussion on the dividend connectedness to the firm’s performance
Sign-in/Register to view highlights & summary Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
