This website uses cookies to ensure you have the best experience. Learn more

Dividend Policy Plays A Crucial Role In Economy

1292 words - 6 pages



Dividend policy is one of the most crucially importance and the most debatable issues in the corporate finance and it still keeps on prominent place in both developed and emerging markets. According Brealey and Myers (2005) described that dividend policy as one of the top ten most difficult unsolved problems in financial economics. This description is consistent with a famous extract by Black (1976) who stated that “The harder we look at the dividend picture, the more it seems like a puzzle with pieces that don’t fit together”.

Hence, dividend is a payment made by corporation to its shareholders members. It is the portion of corporate profit paid out to shareholders. When a corporation earns a profit or surplus that money can be locate by two uses. Which it can either be re-invested in the business that called retained earnings or it can be distributed to all shareholders. There are two ways to distribute cash to shareholders, such as share repurchases or give dividends. Many corporations retain a portion of their earnings and pay the remainder as a dividend.

There are many studies shows that many factors affecting on determinants of dividend payout ratio by some industries in different countries such as Pakistan, United States, Saudi Arabia, India and Kenya has also been conducted in order to illustrate the relationship between a number of factors and the company’s dividend payouts to shareholders. Even though many studies have been conducted, the results show that there are some differences between countries as regards which factors that have an impact on dividend payouts. According to Abdulrahman (2007) said that dividend payout and sectors are not related, but according to Pandey (2007) stated that dividend payout ratios are influences by sectors.

According Amarjit et al. (2010) reported that the factor that affecting dividends payout ratio for firm in the services industry and manufacturing in United State have significantly influenced by cash flow, tax, and profitability.

Previous research also indicate that in year 2008, according to Anil and Sujata says that, there are various factors other than profitability that are participate to affect dividend payout ratio in technology sector in India.

In 2010, Franklin and Muthusamy reported that the factors that affecting in the Indian paper industry employs more leverage for narrating the dividend payout ratios.

Based on non-financial listed firms, according to Mahira (2012) described that the factors affecting dividend payout ratio in Karachi Stock Exchange were significantly influenced on firm size and corporate tax. But these results are contrary to the study made by Maniagi et al, (2013) in Kenya. The study for non-financial firm on Nairobi Stock Exchange revealed there are significances influences on growth and current earnings. At the same time, according to Turki and Ahmed (2013) states that Saudi Arabia stock exchange (TASI), are...

Find Another Essay On Dividend Policy Plays a Crucial Role in Economy

The Crucial Role of Recess in School

808 words - 4 pages Findings: In the “The Crucial Role of Recess in School” (2012) article it explains, many schools are beginning to replace physical activity, like recess, with more attention to academic subjects. What these schools are forgetting is that well-supervised recess also has benefits that surpass academics. They help make a well rounded student because recess offers cognitive, social, emotional, and physical benefits to the student when they are

Crucial Role of Innovation in Competitive Success

2630 words - 11 pages connected Iraq with the rest of the world (Iraq annual report, 2010), The manufacturing sector seizes (capture) 22% percentage of Iraqi stock market capitalization (Iraq annual report, 2010), During the last five years, the manufacturing sector began to play a crucial role in the new investment and transaction which leaded to increase the manufacturing sector percentage in the Iraqi GDP. According to the latest world investment report which issued by

Stakeholder Conflicts and Dividend Policy in Two Firm Types

1745 words - 7 pages pay-out. Thirdly, the relationship between separation and dividends are significantly negative. Finally, there is a significantly positive relationship between dividends and personal ownership and the constitution of the type of ownership effects on the dividend decision. In conclusion, some evidence we have supported, which is consistent with substitute model. (Table 8

How American Immigrants Played a Crucial Role in Battle and the Home front of the American Civil War

1174 words - 5 pages rights as a person and opportunities to succeed in the United States. The Southern states, along with other disadvantages, were at a crucial disadvantage with their lack of immigrations during the Civil War. There were very few immigrants that fought for the Confederacy (Young 2013.) There were also very high rates of desertion in the Irish men of the Confederate army (????.) Some Irish immigrants most likely settled in the South so that

The Role Sports Plays in Our Lives

3934 words - 16 pages presence and the influence of a local coalition group. The local coalition groups are groups of headquartered local corporations, which tend to influence the decisions of the local government, and sometimes the state and federal governments, through strong and tight relationships with decision makers (Mintz and Schwartz 255). Their main role is to influence any project or idea that would stimulate the economy of the city, at least in the way of

The Role Money Plays in Society

2197 words - 9 pages afraid of money. Not the smaller bills, the Washington’s and Lincolns, the Jackson’s and Grants, but the larger sums, the cashiers checks with multiple zeros, the stock portfolios and escrow accounts, afraid too of what they buy, the new cars with their leather stink, the first class seats on airplanes, the cellular phones and fax modems.”(3) Each cell phone conversation gives a glimpse into the role money plays in the society that Linus is

The Role Racism Plays in Death Penalty

1590 words - 6 pages had committed that crime or not. The unequal punishment of the defendant because of the race of the victim is the final example that should show that this problem needs to be solved. No matter the crime, whether it is a murder or a robbery gone wrong, the race of the victim always plays a role. In a study made by the U.S. General Accounting Office (GAO; now the U.S. Government Accountability Office), it was reported that in 82% of the studies

How Crucial Was Lenin's Role In The November Revolution?

725 words - 3 pages Following his death in 1924 Lenin was raised to the status of a god-like figure by Stalin. Lenin's role in the November revolution was therefore seen as crucial. However, was this merely to allow Stalin to gain power by presenting himself as a faithful successor to Lenin? The varying schools of historical interpretation give differing views as to how crucial Lenin's role was in the revolution. Although Lenin spent the majority of 1917 in

The Role Environment Plays in Our Lives

1656 words - 7 pages is necessary to make the unit work. More appreciation for every role. Not just a father who works- a mother who cleans, but a unit that does what is necessary to benefit everybody. What I saw in my real life held much more relevance over what I saw on any screen, in fact at times I felt angry about misrepresentations of family and “real life”, sometimes I was even amused by them. Family and households can have a lot of influence and power. My work

Marketing Research's Crucial Role in Helping Marriott Hotels

989 words - 4 pages Introduction Apart from innovativeness and incisive management, Marketing Research has played a crucial role in helping Marriot segment the market and successfully launch and develop its line of hotels. Marketing research has been a significant backbone for the success of Marriott. Therefore, marketing research is an important requisite for Marriott to keep track of their changing consumer and business customer needs, to identify new

The Crucial Role of Teiresias in Sophocles’ Antigone

674 words - 3 pages The Crucial Role of Teiresias in Sophocles’ Antigone Antigone is a tragic play written by Sophocles in ancient Greece during approximately 441 B.C. The story is set in a palace in Thebes, a city within Greece. Teiresias is an old blind prophet who claims to be capable of seeing the future, he has yet to tell a prophesy to be untrue; he has immense credibility. A theme within the text is: quality not quantity. In this translation of Antigone

Similar Essays

As An Important Element Of Identity Formation, Education Plays A Crucial Role In Bridging Faultlines In Europe

1477 words - 6 pages growing of importance, as it is one of the most formidable force for personal security and collective mobilization as a defensive reaction to globalization. Moreover, the nation state as a source of identity has been weakened and religion has moved in to fill this gap, in the form of movements often labeled as "fundamentalist." Education once again held a crucial role in the religion fundamentalisms, but, on the contrary of what one can think, it

Science Plays A Role In Everything We Do

1203 words - 5 pages Throwing a ball in the air is a simple task, but this simple task has many important scientific factors involved. Science plays role in everything we do even if we don’t think about it. Lots of these things are in our lives and we don’t even acknowledge them on a daily basis. We know they are there, but don’t really think about them just let them do their own thing. When something is flying through the air the number of factors at work is

How The Environment Plays A Role In Learning

1076 words - 5 pages How the Environment Plays a Role In Learning Throughout time we as humans have been learning and adapting to different environments. From birth to death. We are always changing where we may learn something and how to do things. From birth you are immediately learning how to breathe and how to function normally as a person. And as time goes on from birth you start to learn how to eat solid foods, walk, talk, and play. As you get older from

Equivocation Plays A Significant Role In Macbeth’s Destruction

1475 words - 6 pages (Witches have been seen in many stories to bring a supernatural element to the plot. Witches have been known to weave the fabric of human life and then cut the threads to end them. In the play Macbeth, Shakespeare has used the witches to toy with Macbeth’s life with the use of prophecies. ) (The equivocation of the prophecies that was told to Macbeth was a significant role to Macbeth’s destruction.) (Three ways the witches’ tricked Macbeth was