The Influence of Inflation on the Real Value of Paid Out Dividends on the Warsaw Stock Exchange in the Years 2000–2012

Abstract

Abstract The article describes the issue of inflation and its influence on the value of dividends received by investors. In addition, the topic of dividend policy in the conditions of high (double-digit) inflation is discussed. The impact of inflation on the real rate of return from investments should be taken into consideration by investors who invest both in bonds and in shares. Research shows that, whereas bond market investors understand the impact of inflation on discount rates, stock market investors do not account for the impact of inflation on future earnings growth (Chordia et al, 2005, p.554). On the basis of the conducted analyses the author concluded that in the 2000-2012 period, investors generally suffered a loss on the received dividend, if we quantified their size and attractiveness by means of a dividend rate. The objective of the article is the presentation of the issue of inflation from the point of view of dividends paid out by companies (Hazlitt, 2007, p.90, Rutkowski, 2007, p. 245, Sayek, 2009, p. 441) and an investor allocating financial means on the capital market (in shares of companies listed on the capital market and not in bonds. (Laatsch, 2013, pp. 54-59)). The following hypothesis was accepted in the article: H1: in the period 2000-2012 an effective real dividend rate for companies quoted on Warsaw Stock Exchange had a negative value.