Pay Dividends Research Articles

Effect of Bank Size on Earnings Retention for Investment by Commercial Banks in Kenya

The Kenyan economy has continued to register dismal performances in the last few years and banks can play a facilitative function because of their intermediary role. The study sought to find out if the size of a commercial bank has any influence on its level of earnings retention for investment. The retention of earnings by a bank each financial year can have critical importance because it provides a source of funds for investment. The findings of the study are helpful to the management of commercial banks in education to shareholders. The study was anchored on the pecking order theory. The bank size parameters were cash at Central Bank of Kenya and property assets, net borrowed funds, investor funds, and the paid dividend. Though the total banks' population was 39, the study involved 36 banks as units of analysis. To test the impact of size on earnings retention in commercial banks in Kenya, a linear regression model was run. Analysis of the data revealed that 83 % of banks’ earnings retention is influenced by cash at CBK and property assets, net borrowed funds, investor funds, and paid dividends. The results pointed out that, cash at CBK and Property assets, net borrowed funds, and investors’ funds have a positive significant impact on earnings retention while paid dividends have an insignificant impact on earnings retention. Any commercial bank intending to expand its operations by use of retained earnings should work towards increasing variables with significant positive influence or decreasing the parameters with significant negative influence. By this, the commercial banks in Kenya will maximize utilization of the cheapest source of funds for investment and this will also lead to increased earnings due to reduced expenses related to capital acquirement from other sources.

How and why is Homo sapiens so successful?

By 30,000 years ago, Homo sapiens was the only type of hominin and had colonised most environments in the Old World. We argue that this success resulted from its ability to increase its population because more H. sapiens women than their contemporaries were able to have three or more children that survived into adulthood. This increased reproductive rate was accompanied by the development of a rounder brain and a longer childhood. A rounder brain and the accompanying re-organisation of the cerebellum and parietal areas increased our cognitive powers, and when combined with a longer childhood, allowed children to develop their imagination, ingenuity and inventiveness, all of which paid dividends when they became adults – in for example, being able to colonize new habitats or caring for infants and young mothers. Dietary factors may also have been important in ensuring that pregnant females and young children had an adequate diet, especially for women during their first and third trimester. In order to understand better our evolutionary success, we suggest a shift of focus from adult – and often largely male – activities such as big-game hunting towards the diet of infants and young mothers and the development rate of their children.

Optimal dividends and capital injection under dividend restrictions

We study a singular stochastic control problem faced by the owner of an insurance company that dynamically pays dividends and raises capital in the presence of the restriction that the surplus process must be above a given dividend payout barrier in order for dividend payments to be allowed. Bankruptcy occurs if the surplus process becomes negative and there are proportional costs for capital injection. We show that one of the following strategies is optimal: (i) Pay dividends and inject capital in order to reflect the surplus process at an upper barrier and at 0, implying bankruptcy never occurs. (ii) Pay dividends in order to reflect the surplus process at an upper barrier and never inject capital—corresponding to absorption at 0—implying bankruptcy occurs the first time the surplus reaches zero. We show that if the costs of capital injection are low, then a sufficiently high dividend payout barrier will change the optimal strategy from type (i) (without bankruptcy) to type (ii) (with bankruptcy). Moreover, if the costs are high, then the optimal strategy is of type (ii) regardless of the dividend payout barrier. We also consider the possibility for the owner to choose a stopping time at which the insurance company is liquidated and the owner obtains a liquidation value. The uncontrolled surplus process is a Wiener process with drift.

Space-Age Pest Monitoring Will Pay Dividends for Farmers in Kenya

Space-Age Pest Monitoring Will Pay Dividends for Farmers in Kenya

Pay Dividends or Invest in Corporate Social Responsibility: Is there an Inverted-U relationship?

We offer new original insights on the ongoing debate about the financial determinants of CSR activities by investigating the relationship between dividend policy and corporate social performance. Based upon the stakeholder theory, we postulate that satisfying shareholder claims may lead, according to distributive justice, to serving the interests of other stakeholders through corporate social policies. However, when dividends paid are too high, the company may no longer have enough financial slack to satisfy the other stakeholders, implying that dividends are paid at the expense of corporate social policies. We thus expect a curvilinear relationship between dividend policy and corporate social performance. Using a worldwide sample of almost 7,000 observations, we find support for a U-inverted relationship, revealing an optimal amount to satisfy both shareholders and stakeholders. Our findings are robust to both social and environmental pillars, various dividend measures as well as ESG scores.

Why Do Companies Pay Dividends?: A Comment

This study reviews one of the unresolved research puzzles in corporate finance; why do companies pay dividends? In this context, a qualitative study dealing with content analysis is carried out based on theoretical and empirical researches. After critically reviewing 407 research articles in dividend policy, 50 empirical studies were taken as the sample based on relevance to the research puzzle. The content analysis provides some significant insights and stylized facts with regard to the corporate dividend policy. However, the research conducted is fundamentally flawed in its design which is based on quantitative approaches in order to elucidate a behavioural explanation. As a result, most of the study findings cannot be relied upon to see consistency with the theories in question.Despite years of theoretical and empirical evidences, the findings show that the dividend puzzle still remains as an unresolved research phenomenon in corporate finance due to lack of unanimity among the researchers over the explanations. This study provides the reader with an all-embracing understanding of the theories and empirical explanations of the dividend puzzle. It is imperative for the researchers to focus on all empirical and theoretical explanations in a single study and test them simultaneously using a triangular approach in order to have a single consensus over this puzzle. Thus, developing a new paradigm or models to deal with the dividend puzzle is suggested and until then, the deduction of various theories in different studies is inconclusive and inconsistent.

Dividend Policy and the Lintner Model: Why Do Firms Pay Dividends?

For many years, firms payout policies have been discussed widely by economist and finance experts but there is no agreement on why firms payout cash. Firms chose to pay cash dividend to their shareholder and believed to have a payout policy but what determines it remains is a question. Despite the presence of low cost methods of maximizing shareholders wealth firms have maintained high dividend payments regardless of their earnings. Two economists, Miller and Modigliani have contributed a significant amount of research in explaining relevancy of firm’s dividend polices to the shareholders’ wealth. An early study by John Lintner was able to explain the payout policy of a firm but it failed to show what motivates firms to pay dividends. Several economists consider the role of taxes and shareholder preference in determining firm’s policy but evidences suggest that decision makes do pay too much consideration to these factors. Many studies have discussed the changing trends in dividends payouts while advocating the changing preference of manager’s with the rising popularity of share repurchases, our findings suggest the opposite - as we show that companies have actually increased the dividend payouts.

Why Do Firms Pay Dividends?: Evidence from an Early and Unregulated Capital Market*

Why do firms pay dividends? To answer this question, we use a hand-collected data set of companies traded on the London stock market between 1825 and 1870. As tax rates were effectively zero, the capital market was unregulated, and there were no institutional stockholders, we can rule out these potential determinants ex ante. We find that, even though they were legal, share repurchases were not used by firms to return cash to shareholders. Instead, our evidence provides support for the information–communication explanation for dividends, while providing little support for agency, illiquidity, catering, or behavioral explanations.

H5N1 influenza outbreak during March 2006 in Jordan

The highly pathogenic avian influenza H5N1 pandemic motivated countries around the World to be prepared for outbreaks within their borders. Well ahead of the outbreak, in Jordan contingency plans were prepared involving all relevant bodies in both the private and public sectors and a practice was simulated to test the effectiveness of the task force and the applicability of the plan. The highly pathogenic H5N1 influenza virus was detected and confirmed in one turkey in a backyard flock comprising 12 turkeys and 25 chickens in Kufranjah, 6 km from Ajloun city, on 23 March 2006. The samples were confirmed by the following day. Control measures were implemented immediately according to the national contingency plan and complete clean up achieved by 27 March 2006. A 3 km area around the index case was designated as a control zone, with a 10 km area around the holding further designated as a surveillance zone. The objective was to stamp out the infection and approximately 20,000 birds were destroyed including all commercial and backyard flocks in the control zone. All the human contacts were examined, treated and discharged from the hospital. The immediate response from all Jordanian sectors involved in the control strategy was positive as a result of increasing awareness and training programs that were implemented six months before the occurrence of the outbreak. A total estimated economic loss posed by this outbreak including compensation was almost $US169 million. Following the outbreak, passive surveil-lance for the virus was undertaken and training and capacity building continued. Efforts made in the preparation for an outbreak paid dividends and the need for a department responsible for monitoring migratory and wild birds in Jordan was recognized. Legislation regarding biosecurity of poultry farms and poultry transport vehicles should be revised.

Organizing to Organize

After nearly four decades of campaigning, faculty and academic staff union members across the University of Wisconsin system won the right to bargain collectively in June 2009 when the governor signed legislation that modified state labor law. In this article, the author presents historical and interdisciplinary analyses of the organizational structures that were critical to the campaign’s success. While the case study should be interesting for academics across disciplines, the Wisconsin experience carries generalizable lessons for union organizing in any sector of the economy. In addition to cataloguing the tens of legislative attempts that faculty and academic staff unionists undertook to win collective bargaining rights in Wisconsin, the article juxtaposes the legislative goals with environmental variables, such as which political party controlled state government and how many faculty and academic staff were committed to the campaign at any given time as regular dues-paying members. It is clear in this light that persistence paid dividends for the campaign and that leverage created by the local unions in relation to their state and national affiliates was necessary for the campaign’s longevity and success. Against this backdrop, the author also considers the degree to which tensions between a local union and its larger affiliates might variably affect organizing across different international unions. The case study has relevance for discussions of minority or nonmajority unions as well as strategic decisions about how unions pursue level playing fields for organizing new members.

Prior Payment Status and the Likelihood to Pay Dividends: International Evidence

AbstractBy using the signaling model and the life‐cycle theory, I examine the importance of prior payment status in determining the likelihood to pay dividends. I categorize firms into those that paid dividends previously and those that did not. My results show that strong dividend stickiness exists and the determinants to pay differ significantly for the two groups of firms. High growth and low insider holdings make prior payers more likely to pay but prior nonpayers less likely to pay. Furthermore, prior payers are more sensitive to profitability and earned/contributed equity mix, while prior nonpayers are more sensitive to risk and dividend premiums. Finally, taking the prior payment status into account eliminates the problem of overestimating the portion of payers put forth by previous studies.

Why Pay Dividends and Issue Equity Simultaneously? The Controlling Corporate Shareholders' View

This paper proposes an explanation, according to a given investment policy and capital structure, for why some firms pay dividends and issue equity simultaneously. For individual investors, this combination invites additional taxes, wasteful flotation costs, and adverse selection. Within the framework presented herein, dividend policy is tailored for the median shareholder's personal consumption-optimum if the shareholder is dividend-seeking. As long as private benefits from saving taxes and transaction costs outweigh pro-rata costs of equity issue, controlling shareholders find it reasonable to receive positive dividends. They compel the firm to issue equity to finance profitable investment projects.

Does Investing in Interim-Terms Pay Dividends?

Interim-term course offerings are becoming more common as universities attempt to respond to student demand for courses outside the traditional semester time frames and to more fully utilize their resources (both faculty and facilities). One of the concerns with these courses is that the compressed time frame may compromise student learning, in terms of both learning within the course and knowledge retention. This paper considers these issues by comparing the performance of finance majors enrolled in the principles course in an interim session with that of students taking this course in a traditional term. For students in our study, we find that there is no statistical difference in the two groups’ performance within the principles class itself or in the subsequent courses required of all finance majors.

Potential Dividends Versus Paid Dividends: Theoretical and Empirical Reasons to Use Paid Dividends - The Cases of Latin America and Argentina (In Spanish)

Many financial consultants, authors and teachers include changes in liquid assets (potential dividends) in the cash flows. This practice is against basic financial theory. We present economic, theoretical and empirical arguments to support the position to use only paid dividends in the cash flows. Hence when valuing cash flows we should consider paid dividends and not include potential dividends. We present a methodological proposal to find empirical evidence to support this position. We examine the empirical evidence from five Latin American countries and analyze the regional data and the Argentine case. This is a summary of the research results that includes a specific country. In this case, Argentina. Forthcoming, other analysis for specific countries.

Why Do Firms Pay Dividends? International Evidence on the Determinants of Dividend Policy

In the U.S., Canada, U.K., Germany, France, and Japan, the propensity to pay dividends is higher among larger, more profitable firms, and those for which retained earnings comprise a large fraction of total equity. Although there are hints of reductions in the propensity to pay dividends in most of the sample countries over the 1994 to 2002 period, they are driven by a failure of newly listed firms to initiate dividends when expected to do so. Dividend abandonment and the failure to initiate by existing nonpayers are economically unimportant except in Japan. Moreover, in each country, aggregate dividends have not declined and are concentrated among the largest, most profitable firms. Finally, outside of the U.S. there is little evidence of a systematic positive relation between relative prices of dividend paying and non-paying firms and the propensity to pay dividends. Overall, these findings cast doubt on signaling, clientele, and catering explanations for dividends, but support agency cost-based lifecycle theories.

New Employee Orientation: Make it Pay Dividends for Years to Come

First impressions do count, especially to new employees. By properly managing first impressions and the entire orientation process of new hires, IS managers can create an organization in which employees are more productive and to which they feel more connected. the most effective employee orientation programs are often the most creative ones, and this column helps IS managers be innovative when orienting new staff members.

Reserves Pay Dividends

Reserves Pay Dividends

Industrial Health Programs Pay Dividends

Industrial Health Programs Pay Dividends

Can Training Pay Dividends?1

Can Training Pay Dividends?1

Good Letter Openings and Closings Pay Dividends

Good Letter Openings and Closings Pay Dividends