Dividend Rate Research Articles

Optimal dividend and risk control strategies for an insurer when there are multiple reinsurers with different risk attitudes

Suppose that insurer can control dividend, refinancing and reinsurance strategies dynamically. Different from the past, there are multiple reinsurers rather than sole reinsurer in the market. The insurer aim at finding the optimal strategies for maximizing the company’s value. It illustrates that refinancing can be considered iff the company has strong profitability; It should reduce reinsurance purchase when the surplus increases. The amount of risk ceded to the reinsurer depends on its risk attitude. The optimal dividend policy is of barrier type when the dividend rate is unbounded and is of threshold type when the dividend rate is bounded.

Influence of Dividend Payout Rate on Financial Performance of Selected Listed Companies

The purpose of this study was to investigate the effect of dividend payout on financial performance of selected companies listed on the NSE, Kenya. The study was guided by the following specific objectives: Establish the effect of dividend payout rate on financial performance, determine the effect of dividend per share on financial performance, examine the effect of dividend yield on financial performance and determine the moderating effect of company size on financial performance of selected companies listed on Nairobi Securities Exchange. The study used longitudinal research design targeting 57 companies listed on NSE as at 31st December 2020. Purposive sampling technique was used on the target population, whereby 18 least performing companies as at 31st December 2020 were selected. A total of 90 observations were included in the dataset. Secondary data was collected mainly from NSE Handbook 2020-2021 and annual reports of the companies over five years from 2016 to 2020. The analysis involved both descriptive and inferential statistics. An empirical estimation was then carried out involving testing for stationarity of the variables, cointegration and estimating the cointegrating relation. It was expected that the output of this study provided a basis for Board of Directors and managers of companies in Kenya, Investors, Government agencies and regulatory bodies to make an informed decision and develop policies for investments. The study came with findings, made conclusions and appropriate recommendations. Based on the findings, the study concluded that dividend payout rate led to an increase in ROA of selected companies listed on Nairobi’s Securities Exchange. Therefore, dividend payout rate had a positive and significant effect on financial performance of selected companies listed on Nairobi’s Securities Exchange. When companies enhance dividend payout, there is a likelihood of improved financial performance of selected companies listed on NSE, Kenya. The study recommended that companies listed at NSE should ensure that the dividend payout rate is aligned with the company’s long-term strategic objectives. For instance, a mature, stable company may prioritize regular dividends to reward shareholders, while a growth-oriented company may reinvest profits for expansion. Furthermore, the study recommends that the government should support companies by ensuring that there are sound decision practices on dividend payout policy for the sustainability of companies. This study should be used by academicians to understand how well management allocates profits between reinvestment and shareholders returns. Dividend payout rate can be used to tell a company’s financial health and examine key financial metrices. Suggestions for further studies to be carried out in the entire East Africa Region to assess the establishment of companies in Kenya, Uganda, Tanzania, Burundi, and Rwanda, and then compare the results of those listed companies in the region. Also, more studies should be carried out in the future to investigate the effect that dividend policy contain on the expansion of the economy.

Effect of Dividend, Profitability, and Interest Rates on Firm Value with Leverage as Moderating

This research aims to determine the effect of dividend policy, profitability, and interest rates on firm value with leverage as a moderating variable in coal sector firms listed on the Indonesia Stock Exchange. The sampling method uses purposive sampling, with several predetermined criteria, the number of samples is 12 coal sector firms. This research uses panel data analysis. The appropriate panel data model in research uses a fixed effects model. The research results show that dividend policy, profitability, and interest rates have no effect on firm value, and leverage as a moderating variable can strengthen the relationship between dividend policy and profitability on firm value. Companies that use leverage can improve firm performance so that firm value increases. Managerial implications stem from these findings. Executives should adopt dividend policies aligned with firm growth objectivesbalancing shareholder returns with reinvestment opportunities. Enhancing profitability through operational efficiency and strategic decision-making remains paramount. Additionally, monitoring interest rate fluctuations enables proactive management of financing costs and investment decisions. This study examines the influence of dividend policy, profitability, and interest rates on firm value, with leverage acting as a moderating variable. The findings provide valuable insights for managerial decision-making

Examining the Sufficiency of Private Pension Fund in Malaysia using Monte Carlo Simulation

Retirees must make wise plans to have enough savings in order to continue living at the same level after retirement. Retirement planning is essential for ensuring enough retirement funds, which give Malaysians elderlies with a source of income to maintain their standard of living and keep them out of poverty. Uncertainties in dividend rates, interest rates, and inflation have made it difficult for Malaysia's private pension system, notably the Employee Provident Fund (EPF) scheme, to stay financially viable and capable of offering pensioners adequate protection. Thus, this study takes into consideration these important factors in analyzing the sufficiency of the private pension fund in Malaysia for different income groups namely top 20% of income earners (T20), middle 40% income earners (M40) and bottom 40% income earners (B40). Several scenarios are prepared according to Malaysian’s norm to examine the sufficiency of pension fund for each income group. The differences among the scenarios are income groups, retirement age and number of pension fund withdrawals. Then, the Monte Carlo simulation is run to calculate the accumulated value of the pension fund. Following that, the estimated monthly pension amount and the income replacement ratio are calculated to measure pension sufficiency. The results show that the income replacement ratio on average is significantly lower for all income groups as compared to the World Bank standard which stated that the income replacement ratio should not be below 70%. The results also show similar ratio with the current income replacement ratio recorded in Malaysia currently. When the number of withdrawals is taken into consideration, the income replacement ratios on average also show a decreasing pattern for all income groups. These findings indicate that the income replacement ratio in Malaysia is below the ideal rate and the pension amount is not sufficient to maintain the standard of living and purchasing power of retirees. Therefore, the government should take some action regarding this problem focusing on the B40 income group on how to increase their pension fund for better quality of life during retirement and avoid poverty.

The Effects of Dividend Policy on the Growth of Micro Financial Institutions in Bamenda

This paper titled the effects of dividend policy on the growth of micro financial institutions in Bamenda has the objectives to look at the effects of dividend rate on the growth of MFIs Bamenda and the effect of decision of dividend payment on the growth of MFIs in Bamenda. The paper employed the use of secondary data which was accumulated through from 49 Micro Financial Institutions in Bamenda which was the population, the ordinarily least squares model was used. Descriptive statistics was utilized and analysis was done using the SPSS25 program application. Moreover, interpretations were made based on the results gotten. The study demonstrated that dividend rate and decision of dividend payment had a positive and significant effect on the growth of Micro Financial Institutions in Bamenda, the results also revealed that Access to capital markets has a negative insignificant effect on assets, therefore policies that enhance participation in capital markets will lead to a decrease in assets. The paper suggests that MFIs should set appropriate dividend rates so as to continue growing their institutions. MFIs that don't pay dividend but aim to grow ought to begin paying dividend to members.

Maximizing Retirement Savings: Strategic Forecasting of Employees’ Provident Fund (EPF) Dividends

This study embarks on an analytical drive to project future dividends of the Employees Provident Fund (EPF) by harnessing the historical dividend data spanning from 1952 to 2023. With a comprehensive methodology that fuses both descriptive and inferential statistical approaches, the study conducts an in-depth examination of the fluctuations and trends in EPF dividend rates across seventy years. Utilizing EXCEL statistical tools, such regression models, it examines into identifying the pivotal factors that have historically influenced EPF dividends, thereby enabling the prediction of their future trajectories. This endeavor aims to refine the strategies employed in financial planning, ensuring they are more aligned with predicted outcomes. The study uncovers a pattern of volatility in EPF dividends, marked by significant highs and lows which correspond with the changing tides of the economic landscape. The development and application of a predictive model, deemed most effective through this study, shed light on potential future trends of EPF dividends. This model is instrumental in proposing a strategic approach for EPF contributors, tailored to navigate the complexities of investment planning with foresight. Moreover, the significance of this study transcends the boundaries of dividend prediction. It lays down a comprehensive framework that deepens the understanding of how retirement fund dividends are influenced by economic fluctuations. This contribution is invaluable for investors and policymakers alike, providing them with the foresight needed to make informed decisions that could preemptively address the challenges posed by future economic shifts. In essence, this paper makes a profound contribution to the domain of financial planning and analysis by advocating for a shift towards a more proactive and informed management of retirement savings.

Impact of Cost of Capital, Financial Leverage, and the Growth Rate of Dividend on Market Price per Share on Nepalese Commercial Banks

This study seeks to investigate the relationship between the Impact of cost of capital, financial leverage, and the growth rate of dividendson market price per share Nepalese commercial bank. To empirically investigate a sample of 22 commercial banks of Nepal listed in the NEPSE has been selected. The data period for the study is nine years from 2010/11 to 2018/19. The dependent variable is the market price per share whereas for independent weighted average cost of capital, debt ratio, earning per share, net profit margin, dividend per share, and growth rate of dividend are used. The data have been analyzed by using descriptive statistics, correlation, and multiple regression analysis. Empirical results indicate that all the independent variables are positively related to market price per share. The result shows that the growth rate of dividends, dividend per share earnings per share debt ratio, net profit margin, weighted average cost of capital, and market price per share are positively correlated. The regression result reveals that the beta coefficient for weighted average cost of capital is negative, but earnings per share, dividend per share, net profit margin, debt ratio, and growth have a positive beta coefficient.

Market Reaction Towards Dividen Tax Rate Changes of The Omnibus Law on Job Creation In Indonesia

This paper is to investigate the changes in the dividend tax rate effect on the stock price of the companies listed in Indonesia Stock Exchange (IDX) and to demonstrate the existence of abnormal returns by examining stock trading situations before and after the ex-dividend date. Standard event study methodology, using the market model, is employed to determine the abnormal returns surrounding the ex-dividend date. The findings are useful to researchers, practitioners and investors interested in companies listed on the Indonesian stock market for their proper strategic decision making. In particular, the results can be used to encourage transparency and good governance practices in the Indonesian stock market. This study is the first to use dividend tax rate data after the Introduction of the Omnibus Law on Job Creation and the Law on Harmonization of Tax Regulations. By using the event study method, the study reveals that there is no significant difference in abnormal returns prior to and following the ex-dividend date, both preceding and subsequent to the reduction in the new tax rate. Thus, the dividend tax rate reduction does not affect the market reaction in the event window.

Impact of ICT Sector Research and De velopment Expenditure on the Market Capitalization in the US, the EU and China

Purpose: Due to the growing global role of enterprises from the information and communication technology sector from the leading regions of the USA, EU and China in the industry, the author’s research goal was to try to identify factors influencing the value of listed enterprises understood as its stock exchange capitalization. For the purpose, research was carried out on the impact of a group of twenty-six variables on the company’s market capitalization, among which the most important conclusions concern the impact of seven variables, i.e. revenues, research and development expenses, earnings before interest, taxes, depreciation and amortization (EBITDA), earnings before interest and taxes (EBIT), total equity, total assets, total revenues and dividend rate. Design/Methodology/Approach: The study used research methods in the form of a random effects model and a fixed effects model, and then used the Hausmann test to verify which of the models is better suited to establishing the relationship between the selected independent variables and the dependent variable in the form of the stock market capitalization of companies from the ICT sector. Findings: It was found that the impact of equity or the level of revenues on market capitalization is much smaller than in the case of research and development expenses and that the issue of depreciation of assets is an important factor in the market valuation of enterprises from the ICT sector. Additionally, the level of assets and equity has, although limited, impact on the market valuation of the company, regardless of the region in which an entity operates. Revenues are important from a regionalization perspective – company’s market capitalization is the largest in the case of the ICT services subsector in China. There is no similar relationship among manufacturers of ICT devices operating in all three regions. Research limitations/Implications: Due to the fact that the COVID-19 pandemic and the global economic slowdown are important factors affecting the ICT sector, further research on the value of ICT enterprises should take the aspects into account.

EQUITY PRICE DETERMINANTS OF INDIA'S NIFTY NEXT 50 INDEX FIRMS'

An investor must perform research on a stock before investing in it. It becomes critical for a financially savvy investor. As a result, stock prices have long been a source of attraction. Researchers have worked hard to identify the elements influencing stock prices and returns. This paper is an attempt to identify the factors predicting the market price of Equity in India. The secondary data about 2017 to 2022 of NIFTY's Next 50 index companies is analyzed using OLS regression. The findings of the regression are ratified through a qualitative approach by the semi-structured open-ended survey and interviewing experts. The obtained responses are transcribed and coded. Matrix coding has been performed using a qualitative tool such as NVivo to understand the pattern of codes. The study finds that dividend rate, book value, and return on net worth are statistically significant and positively influence the market price of sample firms. Debt to equity ratio has a negative impact on market price. Economic value added (EVA) was found to be a new variable that significantly impacted the market price of shares. The study findings are helpful to the market participants to make wise and knowledge-based investment decisions. The study's findings will also add to the existing body of knowledge regarding stock valuation.

A Comprehensive Analysis of Stock Investment Recommendations Based on the Liquor Industry: Risk, Profitability, and Ratio Perspectives

Focusing on the liquor industry, this study takes Kweichow Moutai Liquor Co., LTD., Shanxi Xinghuacun Fen Distillery Co., LTD., and Sichuan Tuopai Shed Liquor Co., LTD., as the objects, and provides targeted investment suggestions for different types of investors by analyzing risk, profitability, valuation and other indicators. The results show that Kweichow Moutai has an excellent performance in market value and ROA, which is suitable for index investment and ratio analysis investors. Shanxi Xinghuacun Fen Distillery attracts the attention of income investors with its high dividend rate; Sichuan Tuopai Shede Wine's low PE Ratio may attract value investors. Depending on the type of investment, we provide investment advice for index investors, ratio analysis investors, income investors, value investors, PEG investors, discounted cash flow investors, momentum investors, insider trading investors and share buyback investors. The results and analysis of this study can help investors more accurately evaluate the investment value of different liquor companies to meet their specific investment objectives and risk preferences.

The Effect of Cash Holding on Capital Structure of Companies Listed on the Indonesia Stock Exchange

This study discusses the factors that influence company performance in the manufacturing sector on the Indonesia Stock Exchange. The sample used was 20 companies engaged in the manufacturing sector listed on the Indonesia Stock Exchange (IDX) for five years from 2018-2022. The sampling technique used is purposive sampling and the analysis method used is panel data regression. The dependent variable used in this study is Cash Holding Ratio, while the independent variables are Current Ratio, Non-Current Ratio, Total Debt Ratio and with control variables namely Profitability, Firm Size, Dividend Rate, Liquidity. The results of this study indicate that (1) Current Ratio has no effect on Cash Holding Ratio. (2) Non-Current Ratio has no effect on Cash Holding Ratio. (3) Total Debt Ratio has no effect on Cash Holding Ratio. (4) Profitability has a negative effect on Cash Holding Ratio. (5) Firm Size has no effect on Cash Holding Ratio. (6) Dividend Rate has no effect on Cash Holding Ratio. (7) Liquidity has a positive effect on Cash Holding Ratio. The results of this study can be a consideration for companies in allocating corporate funding by paying attention to the use of debt as a source of capital to improve company performance, and consideration for investors in making decisions when investing in companies on the basis of considerations related to the level of use of debt as a source of capital in a company.

Optimality of Threshold Strategies for Spectrally Negative Lévy Processes and a Positive Terminal Value at Creeping Ruin

This article investigates a dividend optimization problem with a positive creeping-associated terminal value at ruin for spectrally negative Lévy processes. We consider an insurance company whose surplus process evolves according to a spectrally negative Lévy process with a Gaussian part and a finite Lévy measure. Its objective function relates to dividend payments until ruin and a creeping-associated terminal value at ruin. The positive creeping-associated terminal value represents the salvage value or the creeping reward when creeping happens. Owing to formulas from fluctuation theory, the objective considered is represented explicitly. Under certain restrictions on the terminal value and the surplus process, we show that the threshold strategy should be the optimal one over an admissible class with bounded dividend rates.

ANALYSIS OF CAPITAL STRUCTURE AND OPERATIONAL PERFORMANCE OF COOPERATIVES: THE CASE OF FIRST COMMUNITY COOPERATIVE (FICCO) IN CAGAYAN DE ORO CITY

This study analyzed the capital structure and operational performance of a Cooperative in Cagayan de Oro City. Cooperatives are considered as voluntary associations where members are encouraged to make regular savings, and then obtain credit for use in their diverse activities. Methodology: The study used a descriptive type of research design with a quantitative data analysis and approach. The source of data was the administrative and annual report of the Cooperative from the years 2009-2017 and other audited reports of the office. Results: Findings revealed that the number of members of the Cooperative from 2009 to 2017 had a continuous percentage increase from 2010 to 2017. The dividend rate for Cooperative members and investors from 2009 to 2017 illustrated that there were fluctuations in the yearly dividend rate but had a continuous decline from 2012 to 2016 and started to recover in 2017. The year 2014 got the highest liquidity ratio with 2.43 and the year 2010 had the lowest liquidity ratio with 2.18. In all periods, even their averages, the cooperative had a liquidity ratio of more than 2 greater than the standard showing that the cooperative can easily satisfy its current obligation with its current asset. Conclusion: The study concluded that the Cooperative was highly liquid. The members' equity in the Cooperative decreased in 2010 and increased in 2011 then continued an increase in succeeding years until 2017 and concluded that members' equity in the Cooperative had a positive average growth rate.

Shareholder tax cuts with household and firm heterogeneity

The large reduction in dividend tax rates stipulated in the Jobs and Growth Tax Relief Reconciliation Act of 2003 has been found empirically to have no, or minor, effects on real outcomes. Motivated by this fact, we build a model that incorporates counteracting theoretical mechanisms of dividend taxes to determine which mechanism dominates quantitatively. Consistently with the empirical findings, the quantitative model generates a small negative effect on investment and negligible positive effects on output and labor earnings.

Measuring the suboptimality of dividend controls in a Brownian risk model

AbstractWe consider an insurance company modelling its surplus process by a Brownian motion with drift. Our target is to maximise the expected exponential utility of discounted dividend payments, given that the dividend rates are bounded by some constant. The utility function destroys the linearity and the time-homogeneity of the problem considered. The value function depends not only on the surplus, but also on time. Numerical considerations suggest that the optimal strategy, if it exists, is of a barrier type with a nonlinear barrier. In the related article of Grandits et al. (Scand. Actuarial J.2, 2007), it has been observed that standard numerical methods break down in certain parameter cases, and no closed-form solution has been found. For these reasons, we offer a new method allowing one to estimate the distance from an arbitrary smooth-enough function to the value function. Applying this method, we investigate the goodness of the most obvious suboptimal strategies—payout on the maximal rate, and constant barrier strategies—by measuring the distance from their performance functions to the value function.

Comparative analysis of financial results and share prices of companies listed on the Bucharest Stock Exchange in 2022

The evolution of trading prices of stocks is influenced by a multitude of factors, some of which are specific to each company (such as financial results, dividend distribution rate, various events that influence its evolution, etc.), while others are of a macroeconomic nature (global economic or political events, general market trends, etc.) or emotional. The intensity of the influence of these factors differs from one company to another, as well as from one period to another. A lot of uncertainty in financial markets marked the year 2022. The amplification of the inflationary phenomenon, the energy crisis, as well as the risks generated by the conflict in Ukraine, made investors reluctant in the stock market, taking positions of "wait and see", often avoiding making major decisions. At the same time, numerous companies, especially those in the energy sector, achieved exceptional financial results, far exceeding what they had obtained in previous years. Although, according to financial theory, there is a close relationship between financial results and the evolution of trading prices of stocks, the results of the study carried out for the year 2022, including the companies listed on the main market of the Bucharest Stock Exchange, do not confirm such a relationship. Although net profit increased significantly in 2022 compared to 2021, trading prices did not follow such a trend, being in decline for most of the analyzed companies.

Impact of monetary methods of economic regulation on fair pricing of shares in the Russian stock market

In the article, the author analyzes the Russian stock market, estimates the fair value of shares of domestic issuers and examines the impact on financial assets of the measures taken by the Central Bank of the Russian Federation within the framework of monetary policy. The fair value of securities is calculated on the basis of a constant dividend growth rate model, where the required return on equity is determined using the CAPM model. The results of the author’s comparative analysis of the fair value and market price of shares of Russian corporations show that securities on the Russian stock market are significantly undervalued. To eliminate the imbalances that have arisen in the financial market, the author suggests that the Central Bank of the Russian Federation implement a softer monetary policy, thus affecting the development of the domestic stock market and increasing the attractiveness of investments in securities of Russian corporations.

FINANCIAL MARKET FRICTIONS AND TRADE IN THE NIGERIAN BOURSE

Using data from 1982 to 2021, this study looked at how financial market frictions affected trade on the Nigerian bourse. For the study, a longitudinal research approach was chosen. The study’s specified model was estimated using the Error Correction Mechanism (ECM) and multivariate ordinary least square (OLS) techniques. Findings revealed that only the capital gains tax rate hindered trading activities in the Nigerian stock market in the long run during the period studied. However, in the short run, transaction costs, capital gain tax rates, and dividend tax rates all have a negative impact on trading activity on the Nigerian stock exchange, but they fail the significant test. As a result, the study concludes that the capital gains tax rate is the only financial market friction that impedes trade on the Nigerian stock exchange during the study period. To mitigate the negative impact on trading activity on the Nigerian bourse, the government should ensure that capital gains are taxed at a reasonable rate. Accordingly, the present capital gains tax rate of 10% should be cut to 5%.

The implementation of conjugate gradient methods for data fitting

The conjugate gradient (CG) method is widely used to solve the unconstrained optimization problem by finding the optimal solution. This problem can be solved by an iterative method. CG method can be classified into classical, modified, spectral, three terms, and hybrid. In this research, Polak-Ribiere-Polyak (PRP), Rivaie-Mustafa-Ismail-Leong (RMIL), Nurul Hajar-Mustafa-Rivaie (NMR) and Linda-Aini-Mustafa-Rivaie (LAMR) are the four chosen methods for this comparison study. These methods are tested under the Armijo line search. There are 14 test functions with five initial points and various variables are chosen. This comparison study is tested using MatlabR2022a to evaluate iteration number and CPU time. The performance profiles of the numerical result are plotted using a Sigma plot. Then, a set of data, the ASB dividend rate is used to form a linear model. In conclusion, PRP performs better than any other method since it yields the best numerical results and is applicable for data fitting.