Purpose The authors measure the cost of equity to earnings yield differential for a sample 2,035 non-financial firms. In series Logit and Tobit regressions, examine if is related dividend policy in manner predicted by agency theory. Design/methodology/approach Agency theory says firm's optimal partially determined relationship between capital. When higher (lower) than yield, firms are motivated...

We study the leverage of firms making large dividend increases. Over the five years following the dividend increase they raise leverage enough to finance the entire dividend increase for that period with debt. This is not explained by trade-off variables or the pecking order. The effect is greatest for big firms with low-powered incentives, suggesting an agency effect whereby they make large di...

The existing literature on law and finance generally assumes that firms are passive recipients of the influence of investor protections on their ability to raise external financing. In this paper, we empirically identify a commitment mechanism, i.e., dividend payouts, which firms use to establish a reputation for better treatment of outside shareholders in order to compensate for country-level ...

This article examines the propensity to pay dividends in U.S banking sector during 1973–2014. Although has been declining over 52 years of our sample period, banks are consistently more likely than non-financial firms. Using coefficients from logit models estimated early period forecast percentage dividend payers each subsequent year, we conclude that there a decline likelihood paying sector. H...

This paper has examined that relationship of institutional shareholdings with liquidity in 95 dividend paying and 100 non dividend paying firms listed on Karachi Stock Exchange from 2008 to 2013. The results are consistent with the “Prudent Man” hypothesis, investment institutions are risk averse and prefer to invest in low volatile, dividend paying and liquid stocks. The study analyzed the imp...

Our study investigates how depositors respond to the bank dividend policy via interest rate channel. The results suggests that by paying dividend, banks mitigate information asymmetry between insiders and outsiders, then enjoying a lower deposit cost than do not pay dividend. Dividend-paying are subject higher funding costs may enjoy greater decrease of non-payers. Banks under pressure from reg...

This study empirically observes the impact of corporate governance index on dividend payout policy by using the data on thirty textile firms listed at Karachi Stock Exchange. The data cover the five-year period from 2009 to 2013. The data were gathered from financial statements of all the sample firms. Multiple regression models were used to check the impact of corporate governance on dividend ...

Using more than 112,000 firm-year observations in 33 countries, we find that two Hofstede’s cultural dimensions, uncertainty avoidance and long-term orientation, remain significant in the determination of dividend policy even after controlling for governance and firm-specific factors. When uncertainty avoidance is high, only firms in countries with stronger investor protection pay more dividend...

Recent empirical studies of dividend taxation have found that: (1) dividend tax cuts cause large, immediate increases in dividend payouts, and (2) the increases are driven by firms with high levels of shareownership among top executives or the board of directors. These findings are inconsistent with existing "old view" and "new view" theories of dividend taxation. We propose a simple alternativ...

This paper analyzes the debt ratio and the scale of cash dividend among the internationalized and domestic electronic industries in the US from 1999 to 2008 as the reference for financing strategies and decision. The evidence shows that the debt ratio and the payout cash dividend ratio in the internationalized electronic firms are lower than those in domestic electronic firms. Due to the unique...