Level Of Dividend Payments Research Articles

Institutional ownership and firm’s dividend policy

This paper examines the linkage between dividend policy and institutional ownership within the context of the dividend model of Allen, Bernardo and Welch (2000). Specifically, it provides an empirical test of Allen, Bernardo and Welch (2000)’s novel implication that a tax differential between institutions and retail investors effects dividend policies. Using merge data of US industrial firms from 1980-2002, our results indicate that the dividend paying decision is positively related with institutional ownership. That is, firms with higher institutional ownership are more likely to be dividend payers. Further, we find that the deferred tax or tax credits that the institutional investors own significantly contribute to the dividend initiation decision as well as the level of dividend payments

Dividends Policy and Ownership Structure in China

Using 3,994 observations of Chinese listed firms from 1995 to 2001, we find a significantly positive correlation between state ownership and cash dividend payment, and a significantly positive relation between private ownership and stock dividend payment. In particular, we find that the relation between dividend payment level and ownership structure is nonlinear. The higher the proportion of state ownership, the higher the cash dividend rate. The higher the proportion of private ownership, the higher the stock dividend rate. We conclude that the managers of Chinese listed companies are likely to cater for the preference of different shareholders.

Dividend Policy in the Lodging Industry

This article analyzes the factors underlying the dividend policy of lodging firms. In addition, it tests whether the market perceives changes in dividends as information about the value of the firm. In a world that is characterized by informational asymmetries between managers and investors, cash dividend payments may be used to convey information from corporate insiders to the company’s shareholders. For example, dividend initiations and increases may convey management’s confidence that the firm is profitable enough to fund its investment projects and to support the new dividend payment level. An alternative explanation is that dividend initiations and increases may reduce agency costs between managers and shareholders, resulting in an increase in the value of the firm. As a result of cash dividend payments, managers will not invest in negative net-present-value projects. Therefore, the announcement of a dividend initiation or increase should be associated with a stock price increase.

Dividend Policy in the Lodging Industry

ABSTRACT In the real world, where market imperfections such as taxes, agency costs, and information heterogeneity exist, the possibility arises that dividends may affect the value of the firm. As a result, dividend policy is an important topic faced by corporate financial managers and an important factor for investors to consider when forming their investment portfolios. This paper analyzes the factors underlying the dividend policies of lodging firms. In addition, it tests whether the market perceives changes in dividends as information about the value of the firm. In a world that is characterized by informational asymmetries between managers and investors, cash dividend payments may be used to convey information from corporate insiders to the company's shareholders. For example, dividend initiations and increases may convey management's confidence that the firm is profitable enough to fund its investment projects and to support the new dividend payment level. An alternative explanation is that dividend initiations and increases may reduce agency costs between managers and shareholders, resulting in an increase in the value of the firm. For example, as a result of cash dividend payments, managers will not invest in negative NPV projects. Therefore, the announcement of a dividend initiation or increase should be associated with a stock price increase.