Do Dividend Payout Ratio Drive the Profitability of a Firm: A Case of Energy and Textile Sector of Pakistan?

Sattar, Anikia; Leifu, Gao; Ahmad, Muhammad Ishfaq; Hassan, M. Kabir; Ali, Rizwan

doi:10.1007/978-3-319-48454-9_39

Cited by 4 publications

(3 citation statements)

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“…Every firm operating in a given industry follows some dividend model or dividend policy and it is considered as an indicator of the financial performance of the firm. An increase in dividend payment is seen as a positive indicator whereas a decrease in dividend payment as a negative indicator on the future earning prospects of the company, thus leading to an increase or decrease in share prices of the firm (Vijayakumar, 2010; Sattar et al, 2017). By paying dividends, the company also has to pay a dividend distribution tax.…”

Section: Introductionmentioning

confidence: 99%

The Effect of Dividend Policy on Stock Price: Evidence from the Indian Market

Singh

Tandon²

2019

Asia-Pacific Journal of Management Research and Innovation

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One of the most debated issue in the field of corporate finance is the relationship between dividend policy and market price of share. There is good amount of literature for and against this issue. The present study has been undertaken to evaluate the effect of dividend policy on market prices of shares of Nifty 50 companies listed on the National Stock Exchange (NSE) for 2008–2017. The data have been analysed by employing multiple panel data regression models namely pooled regression, fixed effect model and random effect model. The Hausman test has been used to suggest the most appropriate regression model. The result of the Hausman test indicates that random effect model is more relevant in describing the relationship among the given variables. The results of the random effect regression model support the relevant approaches of dividend policy. Thus, we conclude that there is significant effect of dividend policy on the stock price of firms.

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Section: Introductionmentioning

confidence: 99%

The Effect of Dividend Policy on Stock Price: Evidence from the Indian Market

Singh

Tandon²

2019

Asia-Pacific Journal of Management Research and Innovation

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“…An increase in dividend payments is seen as a positive signal. On the other hand, a decrease in the dividend payout ratio is a negative indicator of the company's future profit prospects; thus, it can impact the increase or decrease in the company's stock price (Sattar et al, 2017;Singh & Tandon, 2019).…”

Section: Introductionmentioning

confidence: 99%

Correlation Among Dividend Policy and Market Value of Equity In Banking Industry: A Residual Income Approach

Fadila

Nugraheni

Utami

2023

Nominal Barom. Ris. Akunt. dan Manaj.

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This research aims to examine the correlation between dividend payment and the market value of equity of banking firms in the Indonesia Stock Exchange-listed company. The sample includes firms focused on the banking sector period between 2011 to 2020. This study employs the residual income approach based on Ohlson's (1995) valuation model. The models are tested using panel regression analysis. Moreover, additional tests are used to ensure the main results. The finding shows that dividend payment has an insignificant effect on the market value of equity. The analysis states that the use of Ohlson's (1995) model and the firm's book value are statistically significant factors in determining the market value of equity. The study suggests that the dividend irrelevance hypothesis is valid in the case of banking firms on IDX. This paper encourages empirical evidence about the relationship between dividend payment and market value on Indonesia Stock Exchange, more importantly, in the banking firms.Keywords: Dividend Policy, Market Value, Residual IncomeABSTRAKTujuan penelitian ini untuk mengetahui korelasi antara pembayaran dividen dan nilai pasar saham pada perusahaan perbankan di Bursa Efek Indonesia. Sampel penelitian ini berfokus pada perusahaan perbankan selama periode 2011 sampai 2020. Penelitian ini menggunakan pendekatan residual income oleh model valuasi Ohlson’s (1995). Model penelitian menggunakan analsis regresi panel. Selanjutnya, pengujian tambahan dilakukan untuk memastikan hasil pengujian utama. Temuan penelitian menunjukan bahwa pembayaran dividen tidak memiliki pengaruh terhadap nilai pasar saham. Hasil analisis menyatakan model Ohlson’s (1995) dan nilai buku perusahaan secara statistik berpengaruh terhadap faktor penentu nilai pasar saham. Penelitian ini membuktikan teori ketidakrelevanan dividen berlaku dalam kasus perusahaan perbankan di BEI. Studi ini mendorong bukti empiris mengenai hubungan antara pembayaran dividen dan nilai pasar di BEI, khususnya pada perusahaan bank.Kata Kunci: Kebijakan Dividen, Laba Sisa, Nilai Pasar

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“…Dividend decision reflects a company's ability to finance itself internally and affects both overall financing decisions and shareholder perception (Murniati et al, 2019). Dividend payment increases are seen as positive and decreases as negative, impacting the company's future earnings prospects and causing a corresponding rise or Full text can be downloaded https://www.nepjol.info/index.php/craiaj & http://www.craiaj.info/ fall in share prices (Vijayakumar, 2010;Sattar et al, 2017). Reducing dividend payments typically leads to a decrease in a firm's share prices, while increasing dividend payments generates abnormal positive security returns.…”

Section: Introductionmentioning

confidence: 99%

The Impact of Dividend Policy on Stock Prices: Evidence from Nepalese Banking Sector

Gurung,

Chapagain,

Baral

et al. 2023

Contemp. Res.

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The study examined the impact of dividend policy on market price of share in banking sector of Nepal. Out of 27 commercial banks, 10 banks have been selected under convenience sampling with ten years data for the period 2068/69 to 2077/78 were taken for the analysis. Panel data regression models (random effect model) has been utilized to analyze the data as the Hausman test suggest the random effect model is the most appropriate for describing the relationship among the given variables. The result indicates that earning per share, dividend per share, price-earnings ratio and retained earnings have a positive relationship on stock prices of commercial banks. The study concluded that dividend payments lead to a rise in the market price of a stock. Hence, it can be inferred from the outcome of the random effect regression model that it is consistent with the applicable methods related to dividend policy, indicating that there is a noteworthy impact of dividend policy on the stock price of companies. The findings of this study will contribute to the existing literature on dividend policy and market price of share, especially in the context of Nepal. The study will also provide important implications for investors, policymakers, and companies in making decisions regarding dividend rules and its impact on the stock prices.

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Do Dividend Payout Ratio Drive the Profitability of a Firm: A Case of Energy and Textile Sector of Pakistan?

Cited by 4 publications

References 10 publications

The Effect of Dividend Policy on Stock Price: Evidence from the Indian Market

The Effect of Dividend Policy on Stock Price: Evidence from the Indian Market

Correlation Among Dividend Policy and Market Value of Equity In Banking Industry: A Residual Income Approach

The Impact of Dividend Policy on Stock Prices: Evidence from Nepalese Banking Sector

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