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Author: Alaa A. Salih Publisher: ISBN: Category : Corporations Languages : en Pages :
Book Description
This study tackles the relationship between dividend policy and market value of companies in the UK through three empirical models. The aim of the first model was to test the validity of the Irrelevant Theory empirically by exploring the relationship between dividend type (cash dividend, share dividend and share repurchase), earnings (EPS) and investment policy (retained earnings per share) with the market value of a company. This is achieved through the use of annual and semi-annual data for 362 companies in different UK sectors by adopting Panel Data for the period extending from 1998 to 2007 (twenty periods), where the fixed-effect (within) regression model was used to examine this sample . The second model examines if companies favour the investment policy dividend policy by investigating whether or not companies follow a residual dividends policy. This has been identified by following the methodology of Baker and Smith (2006), based on the calculation of Standardized Free Cash Flow (SFCF) for 590 UK companies in different sectors for the period from 1998 to 2007 by using annual data. The third model seeks to explore managerial preferences regarding dividend type and the most important factors affecting the company management when setting dividends policy. In this respect, the importance of the following factors has been tested: the company?s market value; the financing decision; the investment decision; signaling theory; agency theory; and shareholder structure. The questionnaire methodology used for this model where it was distributed to 1319 UK companies in different sectors. The number of responses was 208 responses is equivalent to 15.77% of the total distributed). The study arrived at a number of important results that can be summarized as follows: 1) The invalidity of the Irrelevant Theory, as the results show that there is a relationship between dividend policy and market value of a company; 2) There is a relationship between earnings, investment policy and the market value, which indicates that the dividends policy, announced earnings and investment policy work together in affecting the market value of a company; 3) UK companies, on the whole, do not adopt a residual dividends policy, implying no preference for investment policy over dividend policy, except for the two sectors banking and insurance companies where the results showed that they follow the residuals dividends policy 4) Most UK companies? managements prefer cash dividends to other venues choices because of its easy implementation; and 5) The most important factor affecting UK companies? managements when they set their dividends policy is shareholder structure while the least factor listed in importance is agency theory.
Author: Alaa A. Salih Publisher: ISBN: Category : Corporations Languages : en Pages :
Book Description
This study tackles the relationship between dividend policy and market value of companies in the UK through three empirical models. The aim of the first model was to test the validity of the Irrelevant Theory empirically by exploring the relationship between dividend type (cash dividend, share dividend and share repurchase), earnings (EPS) and investment policy (retained earnings per share) with the market value of a company. This is achieved through the use of annual and semi-annual data for 362 companies in different UK sectors by adopting Panel Data for the period extending from 1998 to 2007 (twenty periods), where the fixed-effect (within) regression model was used to examine this sample . The second model examines if companies favour the investment policy dividend policy by investigating whether or not companies follow a residual dividends policy. This has been identified by following the methodology of Baker and Smith (2006), based on the calculation of Standardized Free Cash Flow (SFCF) for 590 UK companies in different sectors for the period from 1998 to 2007 by using annual data. The third model seeks to explore managerial preferences regarding dividend type and the most important factors affecting the company management when setting dividends policy. In this respect, the importance of the following factors has been tested: the company?s market value; the financing decision; the investment decision; signaling theory; agency theory; and shareholder structure. The questionnaire methodology used for this model where it was distributed to 1319 UK companies in different sectors. The number of responses was 208 responses is equivalent to 15.77% of the total distributed). The study arrived at a number of important results that can be summarized as follows: 1) The invalidity of the Irrelevant Theory, as the results show that there is a relationship between dividend policy and market value of a company; 2) There is a relationship between earnings, investment policy and the market value, which indicates that the dividends policy, announced earnings and investment policy work together in affecting the market value of a company; 3) UK companies, on the whole, do not adopt a residual dividends policy, implying no preference for investment policy over dividend policy, except for the two sectors banking and insurance companies where the results showed that they follow the residuals dividends policy 4) Most UK companies? managements prefer cash dividends to other venues choices because of its easy implementation; and 5) The most important factor affecting UK companies? managements when they set their dividends policy is shareholder structure while the least factor listed in importance is agency theory.
Author: Alaa Al Saedi Publisher: LAP Lambert Academic Publishing ISBN: 9783845424903 Category : Languages : en Pages : 180
Book Description
This book tackles the relationship between dividend policy and market value of companies in the UK through three empirical models. The aim of the first model was to test the validity of the Irrelevant Theory empirically by exploring the relationship between dividend type (cash dividend, share dividend and share repurchase), earnings (EPS) and investment policy (retained earnings per share) with the market value of a company. The second model examines if companies favour the investment policy dividend policy by investigating whether or not companies follow a residual dividends policy. The third model seeks to explore managerial preferences regarding dividend type and the most important factors affecting the company management when setting dividends policy. We arrived at a number of important results you will find it when you read this book.
Author: Luis Correia da Silva Publisher: OUP Oxford ISBN: 0191531812 Category : Business & Economics Languages : en Pages : 204
Book Description
Dividends are not only a signal about a firm's prospects under asymmetric information, but they can also act as a corporate governance device to align the management's interests with those of the shareholders. Dividend Policy and Corporate Governance is the first comprehensive volume on the relationship between dividend policy and corporate governance, and examines in detail empirical studies and current theories. Reviewing the interactions between dividend policy and other corporate governance mechanisms, it compares results for the UK and the US with those for other countries such as France, Germany, and Japan, and provides new empirical evidence on corporate governance in continental Europe and its impact on dividends. Focusing on one of the main representatives of this system, Germany, it highlights major differences between the dividend policies of German firms and those of UK or US firms. Conventional wisdom states that German dividends are lower than UK or US dividends, yet on a published-profits basis the exact converse is true. In addition, the authors demonstrate a link between corporate control structures and dividend payouts, report evidence that the existence of a loss is an additional determinant of dividend changes, and demonstrate that the tax status of the controlling shareholder and the firm's dividend payout are not linked. The conclusions reached in this book have important implications for the current debate on corporate governance, making it invaluable for academics, finance professionals, regulators, and legal advisors.
Author: Publisher: ISBN: 9781846632563 Category : Corporations Languages : en Pages : 83
Book Description
Dividend policy continues to be among the premier unsolved puzzles in finance. A number of theories have been advanced to explain dividend policy. This e-book briefly reviews the principal theories of payout policy and dividend policy and summarizes the empirical evidence on these theories. Empirical evidence is equivocal and the search for new explanation for dividends continues.
Author: Luis Correia da Silva Publisher: Oxford University Press, USA ISBN: 0199259305 Category : Business & Economics Languages : en Pages : 200
Book Description
An analysis of the extent to which dividend payout policy differs from country to country. In particular the authors investigate the differences between the UK market-oriented and the German blockholder-oriented systems.
Author: Ronald C. Lease Publisher: Harvard Business Review Press ISBN: Category : Business & Economics Languages : en Pages : 248
Book Description
With relevant anecdotes, surveys, examples, and research from the financial press, company documents, and academic literature, the book focuses less on mathematics and more on the intuition of share valuation as a function of dividend policy.
Author: Harry DeAngelo Publisher: Now Publishers Inc ISBN: 1601982046 Category : Corporations Languages : en Pages : 215
Book Description
Corporate Payout Policy synthesizes the academic research on payout policy and explains "how much, when, and how". That is (i) the overall value of payouts over the life of the enterprise, (ii) the time profile of a firm's payouts across periods, and (iii) the form of those payouts. The authors conclude that today's theory does a good job of explaining the general features of corporate payout policies, but some important gaps remain. So while our emphasis is to clarify "what we know" about payout policy, the authors also identify a number of interesting unresolved questions for future research. Corporate Payout Policy discusses potential influences on corporate payout policy including managerial use of payouts to signal future earnings to outside investors, individuals' behavioral biases that lead to sentiment-based demands for distributions, the desire of large block stockholders to maintain corporate control, and personal tax incentives to defer payouts. The authors highlight four important "carry-away" points: the literature's focus on whether repurchases will (or should) drive out dividends is misplaced because it implicitly assumes that a single payout vehicle is optimal; extant empirical evidence is strongly incompatible with the notion that the primary purpose of dividends is to signal managers' views of future earnings to outside investors; over-confidence on the part of managers is potentially a first-order determinant of payout policy because it induces them to over-retain resources to invest in dubious projects and so behavioral biases may, in fact, turn out to be more important than agency costs in explaining why investors pressure firms to accelerate payouts; the influence of controlling stockholders on payout policy --- particularly in non-U.S. firms, where controlling stockholders are common --- is a promising area for future research. Corporate Payout Policy is required reading for both researchers and practitioners interested in understanding this central topic in corporate finance and governance.
Author: Eleni Gkeka Publisher: ISBN: Category : Languages : en Pages :
Book Description
Purpose: Dividend policy and its impact on share pricing, has been an issue of great concern for the academic society. Over the years, many theories evolved in an effort to explain dividend policy impact on corporate value. A widely accepted approach is the signaling effect theory. The purpose of this paper is to assess the value relevance of dividend announcement. Design/methodology/approach: Our empirical work uses Greek stock market data. We adopt the event study methodology and incorporate in our research elements that differentiate Greek stock market from other developing markets. Findings: Our empirical results tend to support the theory. Decisions on dividend policy seem to affect corporate value. Investors perceive incremented dividend payments as an indication of positive future prospect and vice versa.Research limitations/implications: Different results between large and medium capitalization shares comprise an interesting element for future research.
Author: Alaa A. Salih
Author: Alaa A. Salih
Author: Alaa Al Saedi
Author: David E. Allen
Author: Luis Correia da Silva
Author: 
Author: Luis Correia da Silva
Author: Ronald C. Lease
Author: Jack D. Glen
Author: Harry DeAngelo
Author: Eleni Gkeka