Paper type literature review 1 introduction explaining dividend policy has been one of the most difficult challenges facing financial economists despite decades of study, we have yet to completely understand dividend policy: a review 7 dividend decision, as a decision about the amount to be distributed as dividends. Review of literature introduction this chapter explains the concepts of dividend announcements and share prices and existing research findings related to dividend announcement and share prices of the public quoted companies. Literature review the first empirical study of dividend policy was provided by lintner (1956), who surveyed corporate managers to understand how they arrived at the dividend policy lintner found that an existing dividend rate forms a bench mark for the management.
Literature review as mentioned before many theories have been propounded to explain dividend decisions and the relationship between dividend policy and the value of a firm modigliani and miller (1958) started a discussion on capital structure and dividend policy presenting the irrelevance theory. The impact of dividend policy on the share price volatility: malaysian construction and material companies zuriawati zakaria¹, joriah muhammad² and abdul hadi zulkifli3 ¹ ph d student, school of management, universiti sains malaysia 20 literature review 21 theoretical review dividends signaling theory. Dividend policy is an important component of the corporate financial management policy it is a policy used by the firm to decide as to how much cash it should reinvest in its business through expansion or share repurchases and how much to pay out to its shareholders in dividends dividend is a. Dividend policy has been a key financial topic that attracted both researchers and practitioners since 1961 in which year miller and mogidliani (1961) proposed that dividends are irrelevant in terms of firm’s value in the circumstance of perfect capital market, rational behaviour and perfect certainty.
Therefore, the literature review on dividend policy has a direct connection to my research proposal there are several factors that explain this connection first of all, any master thesis has to start with a literature review of existing studies in the studied area and these existing studies are presented in the paper. Dividend policy affects the share price and that increase in cash dividend would result in increase in share price for companies listed at the nairobi securities exchange, conversely, an increase in share dividend would result in an insignificant. Literature review dividend is important variable in uk market because dividend announcement raises the market value of the share which results in wealth maximization due to positive change in dividend (al-twaijry, 2006. Literature review of dividend policy of the literature review article the article is called dividend policy: a review of theories and empirical evidence in this article, the main theories on dividend policy are described and their credibility is evaluated. Hence, for the purpose of this paper, a firm's dividend policy is proxied by its dividend payout rate, which is defined as the ratio of dividends per share and earnings per share the remainder of the paper is organized as follows: section ii provides a brief review of the relevant literature.
Dividend policy is the set of guidelines a company uses to decide how much of its earnings it will pay out to shareholders some evidence suggests that investors are not concerned with a company's. Chapter 3: dividend policy and agency theory – evidence on indian firms 128 31 introduction 128 32 a selective review of the literature 132. Dividend policy introduction: dividend is the benefit which any firm gives to its share holders this benefit takes different forms as cash, dividend reinvestment plans, share repurchases, stock.
Literature review “dividend policy” abstract dividend policy is increasingly important for a firm as it is a concerned issue in this changed of business and social norms at the same time, a decision making need to be made by a firm which issuing dividend policy as to allow the firm to gain advantages and bring the profitability to the firm these papers develop with several of theories. Dividend policy & firm performance6 chapter 2: literature review 21relationship between dividend policy and profitability although dividend policy and its impact on financial performance of a company is one of. From the review of the available literature, it was discovered that dividend policy is an important decision area of any business organization, it was also discovered that previous studies on the effect. The relationship between dividend payout and firm performance: a study of listed companies in kenya literature review introduction there is substantial literature on the relationship between dividend policy and profitability dividends are important to shareholders and potential investors in showing the earnings.
(2001), and baker, powell, veit (2002b) and baker et al (2007) and most respondents in these surveys indicated that dividend policy of company affects firm value[2,4,9,10,11. Dividend policy got attention in 1956 with the work of lintner (1956) he showed that us companies literature review miller and modigliani (1961) documented that the dividend policy of a firm is irrelevant, under a perfect market situation they argued that the value of the firm is determined by its investment and financing decisions within. – this paper aims to briefly review principal theories of dividend policy and to summarize empirical evidences on these theories design/methodology/approach – major theoretical and empirical papers on dividend policy are identified and reviewed. Literature review on corporate governance and dividend policies in a pioneering effort, black (1976) finds no convincing explanation of why companies pay cash dividends to their shareholders.