Determinants of payout policy and investment attractiveness  of companies listed on the Warsaw Stock Exchange

Pieloch-Babiarz, Aleksandra

doi:10.24136/eq.v12i4.35

Cited by 8 publications

(4 citation statements)

References 19 publications

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“…There are many research papers dedicated to different aspects of the cost of equity capital (hereinafter referred to as CEC) management (see e.g., Michalak, 2016;Pieloch-Babiarz, 2017;Tomczak, 2017;Pustylnick, 2017;Dokulil et al, 2017). As a rule the internal factors and their impacts that are analysed by international scientists can be divided into several groups as corporate disclosure, corporate governance, social performance and other financial related performance.…”

Section: Introductionmentioning

confidence: 99%

Internal factors influencing the cost of equity capital

Mokhova¹,

Zinecker²,

Meluzín³

2018

JESI

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In this paper we compile and evaluate the research available on internal factors influencing the cost of equity capital. The topic has been extensively studied for the past few decades; however, the information is spread and is not accumulated. We begin by reiterating the reasons why information asymmetry drives financial decisions. Next, we review recent literature that focuses on financial disclosure and accounting information, i.e. internal factors that are directly connected with information asymmetry. In the remainder of our review we discuss a recent debate on the impact of corporate governance and social factors. Aside from theoretical contribution, the comprehensive literature review of existing studies results in formulation of a strategy how to decrease to cost of equity capital by means of internal factors adjustments. We believe that highlighting the key points in the debate will be beneficial for both academicians and practitioners who will be able to form an independent view of the approaches how to take influence on the cost of equity capital.

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Section: Introductionmentioning

confidence: 99%

Internal factors influencing the cost of equity capital

Mokhova¹,

Zinecker²,

Meluzín³

2018

JESI

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“…The achievement of their investment goals is possible, in particular, after an investment decision as the consequence of analysis of not only the company's dividend policy (understood as a strategy of dividing the net profit into the part paid to shareholders in the form of dividend and part left in the company for development purposes), but also the company's financial condition. The financial standing of the company is not only an essential factor in making investment decisions, but also one of the determinants of conducting a dividend policy [17].…”

Section: Literature Reviewmentioning

confidence: 99%

“…In the literature, the most important financial determinants of dividend payment include the following factors: a) liquidityaccording to the agency theory highly liquid companies pay out dividends to reduce agency costs [14]; b) profitabilitybased on the signaling theory, it should be indicated that companies that achieve high net profits may pay out dividends in order to send a positive signal to the market about their financial condition [12]; c) leveragea high debt increases the costs of external financing, and consequently also the risk of its operations. In addition, companies with high levels of indebtedness may be less inclined to pay dividends when they use the net profit to pay off their liabilities [7]; d) growth opportunitiesit is indicated that mature companies are more eager to pay out dividends due to lower investment opportunities and greater chances of obtaining cheaper capital for development [6]; e) company's sizeit has been proven that larger companies pay dividends relatively more often and of greater value [17]. It may be related to the stage of the company's life cycle, its development opportunities or the sector's maturity.…”

Section: Literature Reviewmentioning

confidence: 99%

first-largest shareholder and the attractiveness of investing in Polish dividend companies

Pieloch-Babiarz

2021

PPA

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The purpose of this article is to examine the attractiveness of investing in shares of listed companies that regularly pay out dividends depending on the type of the first-largest shareholder. In order to achieve the aim of the paper, two following research questions we formulated: 1) in which companies, broken down by type of the first-largest shareholder, is the highest dividend payment observed? 2) considering the main shareholder, owning shares of which dividend companies is most beneficial for a stock market investor? Furthermore, the research hypothesis is: when investing in dividend, the most attractive investments are those companies in which the most shares are held by institutional investors and the State Treasury. The research was conducted on non-financial companies listed on the Warsaw Stock Exchange in the years 2005-2019 that regularly paid out dividends. The main research method was the classical technique for order of preference by similarity to ideal solution (i.e., TOPSIS) in which stimulants and destimulants were selected in a way which enables to assess the investment attractiveness from the point of view of a long-term stock market investor interested in dividend. Moreover, the Pearson correlation matrix and descriptive statistics were used. In order to conduct the computation we used the statistical software Statistica 13.5 and Excel.The research revealed that the highest dividends were paid out by these companies in which the first-largest shareholder was the institutional investor. In addition, our calculations based on a synthetic indicator showed that the most attractive investments (in terms of stock market investor interested in so called ‘dividend investing’) were shares of these companies in which the main shareholder was an institutional investor, individual investor and legal person. In all these types of companies, the average value of dividend payout ratio was higher than in the entire research group. The fourth position in terms of investment attractiveness was occupied by the companies in which managers held the most shares (these companies paid out the lowest dividends in the entire research group). The last place in the ranking was taken by the companies in which the State Treasury was the main shareholder (these companies, despite the payment of high dividends, turned out not to be attractive investment due to their financial condition, and in particular, very high debt).

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“…Analytical information, including those regarding the financial condition, not only allows efficient and effective day-to-day management of the entity, but also serves to make the right strategic decisions facilitating the development of the company in the future. They are also important for the company's stakeholders, in particular for current and potential investors (Pieloch-Babiarz, 2017;Pietrzak et.al. 2017).…”

Section: Introductionmentioning

confidence: 99%

Assessment of the company’s financial condition using a synthetic measure based on the example of a confectionery company

Zdunek-Rosa

Huterska

Łapińska

et al. 2020

EiP

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Motivation: Many methodological problems are associated with measuring and forecasting the company's financial standing. Various methods have been developed to assess the current and future financial standing of enterprises. Their usefulness requires development and verification based on the example of a specific enterprise. The evaluation of one of these methods is the subject of this article. Aim: The research objective of the article is to propose a method for assessing the financial situation of a company and to carry out a forecast of the financial condition of an economic entity based on this method. To analyse the condition, indicator analysis and one of the methods of multivariate comparative analysis (MCA) were used-a synthetic measure was constructed, and then the time series analysis method was used (the model of the internal structure of the examined process was estimated). The study also attempts to determine the company's financial condition forecast. The results of the study were presented based on the example of a company representing the food industrythe Wawel SA company. Results: In this study, the financial condition of the company was presented using a synthetic measure, which is a tool for multivariate comparative analysis (MCA). A model of the internal structure of the examined process was also estimated, based on which a forecast of the financial condition of a selected company representing the food industry was determined. The analysis showed that the presented methods are very useful for assessing and forecasting the company's financial condition.

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Determinants of payout policy and investment attractiveness of companies listed on the Warsaw Stock Exchange

Cited by 8 publications

References 19 publications

Internal factors influencing the cost of equity capital

Internal factors influencing the cost of equity capital

first-largest shareholder and the attractiveness of investing in Polish dividend companies

Assessment of the company’s financial condition using a synthetic measure based on the example of a confectionery company

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