Amount Of Dividends Research Articles

When no news is good news: failing to increase dividends

PurposeThe study's purpose is to examine market returns around dividend announcements that contrast with a pattern of prior dividend announcements.Design/methodology/approachThe paper identifies firms that have a smooth dividend pattern of once-a-year dividend increases but at some point break that pattern and announce an unchanged dividend. The sample design allows the opportunity to investigate the market reaction to unchanged dividend announcements when an increase was likely to have been expected.FindingsThe results indicate that failing to increase the dividend is associated with significantly positive abnormal returns that are greater in magnitude for more entrenched dividend-increase records, supporting a contrast-effect hypothesis.Originality/valueThe results indicate that dividends are interpreted not only relative to the immediate dividend amount but also how the decision contrasts with dividends over a prolonged period. This finding suggests that the information content of the announcement of an unchanged dividend can vary according to the prior dividend pattern.

The Impact of Privatization of IDBI Bank in Indian Economy

Privatization refers to the public shares and Assets which are sold to the private sector in the economy. It decreases the power of government control and creates the other policies method. Privatization leads to cutting short the capital and revenue expenditure, which leads to an increase in share value in the market. During the pre-privatization period, the government used to pay less amounts of dividends to its shareholders due to its complex cost structure. Privatization leads to cutting short the capital and revenue expenditure, which leads to an increase in share value in the market. It also gave information about Public and Private sector banks. Our objective is to compare the pre and post-privatization performance like other banks of developing countries shows that privatization resulted in significant gains in profitability and efficiency. To evaluate the impact of privatization in the Indian banking sector and the relationship between privatization and Indian Economic growth by using a case study of IDBI bank condition of Indian private sector banks is analyzed using the financial statement of IDBI Bank with the help of different research methodologies.

Do Firms Consider Economic Outlook When Determining Payout Policy?

Payout policy is one of the most important policies set by firms and represents a major use of capital by publicly traded corporations. Firms should consider future economic activity and future firm performance when determining payout policy choices, given they are cash outflow commitments from the firm. We empirically examine whether firms use economic outlook when determining payout policy using publicly available data from the Chicago Federal Reserve Bank and Compustat. We find that economic outlook is positively related to firm payout policy. Specifically, we find that firms are more likely to pay out cash dividends and repurchase shares when economic outlook is positive. Furthermore, when examining only firms already paying dividends and/or repurchasing shares, firms pay greater amounts of cash dividends and repurchase more shares when economic outlook is positive. We are the first, to our knowledge, to examine whether firms use economic outlook to determine their payout policy. Our paper motivates future research in corporate finance to examine how firms use economic outlook when making capital planning decisions.

A Bayesian Structural Time Series Analysis of the Effect of Basic Income on Crime: Evidence From the Alaska Permanent Fund

AbstractThis paper examines the impact of Alaska’s Permanent Fund Dividend on crime. The Dividend has been payable annually to state residents since 1982 and is the world’s longest-running example of a basic income. Initially universal, from 1989 onwards eligibility was withdrawn from an increasing proportion of those in prison. A Bayesian structural time series estimator is used to simulate Alaskan crime rates in the counterfactual no-Dividend case. A comparison with actual rates provides an estimate of the Dividend’s impact. This does not provide strong evidence of an effect. However, incorporating information on Dividend amounts suggests the size of payments is important, with larger amounts reducing crime. There is no evidence that this effect is reinforced by the 1989 change to eligibility. The results demonstrate the potential for a basic income to encourage positive outcomes and lend support to payment being universal rather than conditional.

Optimal Dividend and Capital Structure with Debt Covenants

We consider an optimal dividend and capital structure problem for a firm, which holds a certain amount of debt to which is associated a financial ratio covenant between the firm and its creditors. We study optimal policies under a bankruptcy framework, using a mixed reduced and structural approach in modeling default and liquidation times. Once in default, the firm is given a grace period during which it may inject more capital to correct the situation. The firm is liquidated if, by the end of the grace period, assets do not exceed the debt. Under this setup, we maximize the discounted amount of dividends distributed minus the capital injected up to the time of liquidation. It gives rise to a two-dimensional singular control problem leading to a non-standard system of variational inequalities. Beyond the usual viscosity characterization, we completely solve this problem and obtain a description of the continuation, dividend and capital injection regions enabling us to fully characterize the optimal policies. We conclude the paper with numerical results and illustrations.

Cash Dividends and Share Repurchases in Ukrainian Pharmaceutical Companies

The study attempts to pinpoint politically and economically induced corporate payout patterns in Ukrainian pharmaceutical firms. The authors identify key trends of corporate payouts of private pharmaceutical companies in Ukraine. The research analyses panel data generated from the ten biggest firms during 2010–2017. Pooled ordinary least squares (OLS) regression is used to check if financial performance, competition and macroeconomic indicators affect the level of cash dividends and share repurchases. The final sample includes 720 observations. The decision to pay a certain proportion of dividends and repurchases is an outcome of countervailing macroeconomic, firm-level, competitive and political forces. The amount of cash dividends is directly proportional to retained earnings and earnings per share. Dividends also tend to decline as total assets grow. Share repurchases are negatively affected by Consumer Price Index and market competition and boosted by increased retained earnings.

ANALISIS PENGARUH LABA BERSIH, SALES GROWTH, KEPEMILIKAN MANAJERIAL, DAN LEVERAGE TERHADAP KEBIJAKAN DIVIDEN

Dividend policy is a management decision of a company in determining the amount of dividend to be distributed to shareholders. Investors who have long-term goals will choose a return in the form of dividends in large quantities or relatively stable to reduce the uncertainty of investors who have invested their funds in the company. This research uses multiple linear regression analysis that will test the influence of net income, sales growth, managerial ownership, and leverage to dividend policy. The samples used in this study were 75 manufacturing companies listed on the Indonesia Stock Exchange for the period 2016–2018. The results of this research indicate that net income has a significant effect on dividend policy, while sales growth, managerial ownership, and leverage do not have a significant effect on dividend policy.

CSI Index Reconstitutions: A Quasi-Natural Experiment in China

We investigate whether the index reconstitutions of the China Securities Index (CSI) are suitable as a quasi-natural experiment to investigate the effect of institutional ownership on corporate policies. Using both actual and predicted index constituents, we document a sharp discontinuity in institutional ownership, especially of domestic mutual funds around the CSI 300 and 500 index thresholds, overcoming a key concern of the approach based on the Russell reconstitution. Using inclusion in the CSI 500 index as an instrument, we find that higher institutional ownership increases the likelihood and amount of dividends, improves firm performance, and improves the information environment surrounding firms. These findings inform us of the salience of domestic institutions in emerging markets.

The impact of ownership concentration on payout across Nordic firms

We investigate whether ownership concentration influences payout policy and which effect foreign institutions and government as large shareholders have on payout across firms listed in the Nordic countries. We find that the impact of ownership concentration on payout largely differs among the countries. Higher ownership concentration leads to lower propensity to pay dividends in Finland and to repurchase shares in Norway and Sweden, while higher ownership concentration increases the propensity to dividend payment in Denmark and Norway. We show that ownership concentration has a negative impact on dividend amounts in Sweden and on repurchase amounts in Denmark, Finland and Sweden. We also find that the impact of ownership concentration on propensity to payout and on the payout amount is influenced by foreign institutions and governments as large shareholders. Our findings imply that the impact of ownership concentration on payout is significantly influenced by the context behind ownership concentration.

Government Ownership and Dividend Payment Policy

The purpose of this study to examine and analyze differences in the average policy of dividend payments with government ownership in companies listed on the Indonesia Stock Exchange in period 2008-2017. Previous research still shows differences in research results or inconsistent results between one study and another. The results showed that the average dividend payment policy carried out by the government was higher than companies that did not have government ownership. This is considered as government ownership, so the amount of dividends distributed will increase. Based on the results of this study it can be concluded that government ownership provides an average higher dividend payment policy than non-government ownership. Suggestions for company management, in making dividend payment policies, the company should always consider the interests of the company’s owners. Investors should pay attention to factors outside the economy in investing. For further researchers, it can be used as an additional reference and research can be done one by one sector.

Pengaruh Laba Bersih, Arus Kas Bebas, Dan Arus Kas Operasi Terhadap Dividen Tunai Pada 12 Perusahan Makanan Dan Minuman Yang Terdaftar Di Bursa Efek Indonesia (Periode 2012-2018)

Abstract : Cash Dividends are the most common type distributed by companies to shareholders. Because cash dividends help reduce the risk of uncertainty in shareholder investment activities. And for companies dividend payments can be used to strengthen the company's position in finding additional funds in the capital market. In determining the amount of dividends to be distributed by management is often faced with a difficult decision. This difficulty is caused by management having to consider paying dividends that are smaller, larger, permanent or stable, because any decision on dividend payments will result in investors acting on the company's shares.
 This study aims to analyze the effect of net income, free cash flow and operating cash flow on cash dividends. Data was obtained from companies listed on the Indonesian stock exchange in the period 2010-2016. This research uses descriptive verification research method. The independent variables in this study are Net Income (X1), Free Cash Flow (X2), and Operating Cash Flow (X3) and the dependent variable in this study is Cash Dividend (Y).
 The results of the study and discussion show that in partial testing (t-test), obtained from the tcount for Net Profit of 2.727 and tcount for Free Cash Flow of 2.086 is greater than the table of 1.989. For Operating Cash Flow variable has no influence on Cash Dividends. The assessment can be seen from the tcount for Operating Cash Flow of -1.201 smaller than t table 1.989.
 Whereas in simultaneous testing (F test), Net Profit (X1), Free Cash Flow (X2) and Operating Cash Flow (X3) simultaneously affect Cash Dividends. The coefficient of determination obtained by 16%, while the remaining 84% is influenced by other factors ignored by the writer in this study.

Pengaruh Profitabilitas pada Kebijakan Dividen dengan Investment Opportunity Set sebagai Variabel Pemediasi

The amount of dividends distributed to shareholders depends on the company's dividend policy. This study aims to obtain empirical evidence about the effect of profitability on dividend policy with an investment opportunity set as a mediating variable. This research was conducted at companies classified as LQ45 index on the Indonesia Stock Exchange. The sampling method used was purposive sampling to obtain 87 observations. Data analysis technique used is path analysis. Based on research results, it is known that profitability has a positive and significant effect on investment opportunity set. Profitability has a positive and significant effect on dividend policy. Investment opportunity set has a negative and significant effect on dividend policy. Investment opportunity set is able to mediate the effect of profitability on dividend policy.

Stochastic Optimization Models of Actuarial Mathematics

The paper overviews stochastic optimization models of actuarial mathematics and methods for their solution from the point of view of the methodology of multicriteria stochastic programming and optimal control. The evolution of the capital of an insurance company is considered in discrete time. The main random parameters of the models are insurance payouts, i.e., the ratios of paid insurance claims to the corresponding premiums per unit time. Optimization variables are the structure of the insurance portfolio (gross premium structure) and amount of dividends. As efficiency criteria, indicators of the profitability of the insurance business are used, and, as risk indicators the ruin probability and the recourse capital necessary to prevent the ruin are taken. The goal of the optimization is to find Pareto-optimal solutions. Methods for finding these solutions are proposed.

Catering theory and dividend policy: A study of MENA region

According to the catering theory of dividends, a company decides to distribute its dividends according to investor demand related by a dividend premium that results in this request. This study focuses on the impact of the catering theory of dividends of the 600 MENA companies in the financial industry listed in different stock exchanges of Tunisia, Morocco, Egypt, UAE, Saudi Arabia, and Kuwait during the period 2004-2010. The study employs an event study methodology in examining the effect of investor demand for dividends on the managers’ decision to distribute and change the amount of dividends. Research result indicates that companies pay dividends when demand is strong, i.e. when investors value companies that pay in a “depressed” or “bearish” market environment. Furthermore, catering persists even after controlling for the effect of some variables like tax and risk. The results confirm that the decision to change the amount of the payments depends on investor demand and the market premium resulting from the payment of dividends. Even though the result is not strong, it can be the evidence supporting the catering theory of dividend, not only in well-developed markets but also in emerging markets characterized with civil law characterized by low governance index and investor protection such as our MENA zone countries.

Diversified Ownership Structure and Dividend Pay‑outs of Publicly Traded Companies

The aim of this article is to identify and characterise the relationship between the ownership structure and dividend pay‑out of listed companies. The research hypothesis states that along with an increase in a degree of ownership concentration both the propensity to pay a dividend and its amount increase. The research has been conducted on a group of 354 non‑financial companies listed on the Warsaw Stock Exchange. The basic research method is the analysis of logistic and tobit regression. The research shows that along with an increase in the complexity of the ownership structure, the share of the State Treasury, institutional investors and board members, decisions on dividend pay‑out are made more often, and the amount of dividend is higher. Examining the degree of ownership concentration expressed by the Herfindahl‑Hirschman index, diversified results have been obtained. An estimation of some regression models shows that stronger ownership concentration favours the decision to pay a dividend (dividends are paid out more frequently), however, as a degree of ownership concentration increases, a decrease in the amount of dividend is observed.
 The research results presented in this article are a supplement to the existing analyses carried out on the global markets and an extension of the existing research conducted on the companies listed on the Warsaw Stock Exchange.

Impact of Catering Incentives on Dividend Payment Decisions: Evidence from Indian Firms

Manuscript type: Research paper Research aims: The present study examines whether the catering incentives of dividends can influence firms’ dividend payment decision for 781 sample firms listed on the National Stock Exchange (NSE) of India during the period of 1995-2015. Design/Methodology/Approach: This study uses dividend premiums to measure the catering incentives of the dividends. The firms’ dividend payment decision is measured by the propensity to pay dividends, and the decision to change dividend payments. Research findings: The empirical results indicate that the catering incentives of dividends have a significant positive impact on the changes in the propensity to pay dividends. The findings suggest that the higher dividend premiums indicating the investors’ higher demand for dividends can induce managers to increase the amount of dividends paid. Firm managers are less likely to cut or omit dividends when the investors’ demand for dividends is high as reflected by the higher dividend premiums. Theoretical contribution/Originality: The catering theory of dividend which is based on investor sentiment is new, and the empirical evidence supporting this theory is limited. This study aims to contribute to existing literature by examining whether the catering incentives of dividends can influence firms’ dividend payment decision, in the context of India, during the period of liberalisation. Practitioner/Policy implication: This study has an implication for the management team. The investors in the Indian capital market show a preference for dividend payment. Firm managers could use these catering incentives for deciding dividend payments to investors. Research limitation/Implications: As the study has not used the primary survey approach to collect data, it could not examine the corporate managers’ and the investors’ views about the determinants of the dividend policy. New insights could thus be provided by analysing the behaviour of other forms of dividends like bonus shares, stock splits and the share buybacks. Keywords: Catering Incentives, Dividends, Dividend Policy, Dividend Premium, Propensity to Pay JEL Classification: G30, G35

What firm’s characteristics drive the dividend policy? A mixed-method study on the Euronext stock exchange

What drives the dividend policy at the firm level? Literature has been mainly focused on taxes, type of shareholders and market effects. In this paper, we perform a novel approach to dividend policy literature. First, controlling for tax, market and shareholders effects, the paper intends to analyse which firm variables are more relevant on the decision to pay dividends, on the decision to pay regular dividends and on the decision of the amount of dividends. The paper uses non-financial firms listed on Euronext stock exchanges from 2000 to 2017, and we combined a quantitative econometric perspective with a qualitative, using fsQCA. We found that variables such as operating margins, analyst’s coverage and shares in free float have substantial impacts on the dividend policy of firms. Moreover, firm’s size is the major determinant of the dynamics of the dividend policy.

Testimony of Jesse M. Fried on Stock Buybacks Before the U.S. House of Representatives Subcommittee on Investor Protection, Entrepreneurship, and Capital Markets

This statement presents my views on buybacks and my general reactions to provisions in four pieces of legislation relating to stock buybacks. Part I describes the role of stock buybacks in the economy and offers some “investor-benign” explanations for firms’ use of repurchases rather than dividends to distribute cash to investors. Part I then explains that the overall level of shareholder payouts (that is, the total amount of dividends and repurchases) does not appear to be too high; in fact, it may well be too low. Part II describes the current regulation of buybacks, which I believe is too lax and enables their abuse by corporate executives. In particular, I will explain how current regulation can enable executives to use buybacks to enrich themselves at the expense of public investors, through (1) indirect insider trading, (2) the manipulation of the stock price and EPS metrics in compensation arrangements, and (3) “false signaling:” announcing repurchases that executives do not intend to carry out, solely to boost the stock price before executives unload shares. Part III suggests a disclosure rule that would reduce executives’ ability to engage in the above-mentioned abuses, and therefore, better protect public investors: requiring public firms (like their insiders) to disclose trades in firm stock within two business days. I also describe additional measures that could be taken if this disclosure rule turns out be insufficient. Part IV offers initial reactions to key provisions in these four pieces of legislation.

Nasdaq ex‐day behavior: An out‐of‐sample test

AbstractWe test various explanations of the ex‐dividend day price anomaly using Nasdaq‐listed firms. Similar to NYSE‐listed firms, on average the prices of Nasdaq‐listed firms drop by less than the dividend amount. However, the average Nasdaq price‐drop is substantially smaller than what existing theories would predict and translates to an imputed dividend tax rate that is double the maximum tax rate. We thus find little support for the tax hypothesis. We also find little support for the short‐term trading hypothesis and various other explanations. The significant disconnect we document between Nasdaq dividends and price changes seems to support the “free dividends fallacy.”

Effect Of Net Income And Operating Cash Flow On Cash Dividends

In invested, investors are more interested to shared profits at the form of cash dividends. The factor that can determine the amount of cash dividends that companies shared to investors are financial condition of the company which consists of net income and operating cash flow. The objective of this research is to determine the influence of net income and operating cash flows on cash dividends. The population of this research was pharmaceutical sub-sector manufacturing company on the Indonesia Stock Exchange (IDX) 2013-2018 Period. The sampling technique used in this research is purposive sampling method, and five companies have conform of that criteria sampling. This research used multiple linear regression analysis with IBM SPSS 23 software.The result of this research showed that (1) net income has influence on cash dividends (2) operating cash flow has influence on cash dividends.