Catalogue Search | MBRL
Are you sure you want to remove the book from the shelf?
{{itemTitle}}
25,728,161
result(s) for
"dividend"
Sort by:
Repaying an Unlawfully Paid Dividend
It is well settled that directors are jointly and severally liable for an unlawfully paid dividend, being one that is not paid out of distributable profits. Strict rules apply to the meaning of distributable profits and the authorization of the payment of a dividend. What is not so clear is when a member may retain an unlawfully paid dividend. Section 847 of the Companies Act 2006 (CA 2006) indicates that a member must repay it if he knows that it is unlawfully paid, though it is not clear what constitutes ‘knowing’ in this content, or what the position should be if a member does not immediately know if the payment is unlawful, but subsequently discovers that it is. Case law is not especially helpful in dealing with this point. It is suggested that a solution to this gap in the law may be found in the precise wording of section 847, and that a member’s liability to repay should be limited to a period of six months after payment (similar to an unfair preference). Directors, Liability, Shareholders, Dividends, Unlawful distribution
Journal Article
Dividend Smoothing and Predictability
The relative predictability of returns and dividends is a central issue because it forms the paradigm to interpret asset price variation. A little studied question is how dividend smoothing, as a choice of corporate policy, affects predictability. We show that even if dividends are supposed to be predictable without smoothing, dividend smoothing can bury this predictability. Because aggregate dividends are dramatically more smoothed in the postwar period than before, the lack of dividend growth predictability in the postwar period does not necessarily mean that there is no cash flow news in stock price variations; rather, a more plausible interpretation is that dividends are smoothed. Using two alternative measures that are less subject to dividend smoothing-net payout and earnings-we reach the consistent conclusion that cash flow news plays a more important role than discount rate news in price variations in the postwar period.
This paper was accepted by Wei Xiong, finance.
Journal Article
Determinants of dividend policy: evidence from an emerging and developing market
Purpose
The purpose of this paper is to identify the determinants of dividend policy in an emerging and developing market.
Design/methodology/approach
The study employs a quantitative approach using 191 Sri Lankan firms and 1,337 firm-year observations as the sample. The authors apply a Binary Logistic Regression model to uncover the determinants of the propensity to pay dividends, and a Fixed Effect Panel Regression to investigate the determinants of dividend payout.
Findings
The authors identify past dividend decision, earnings, investment opportunities, profitability, free cash flow (FCF), corporate governance, state ownership, firm size and industry influence as the key determinants of propensity to pay dividends. In addition past dividends, investment opportunities, profitability and dividend premium are identified as the determinants of dividend payout. Moreover, there is a feedback between dividend yield and profitability in one lag and between dividend yield and dividend premium in two lags, as short-term relationships. Hence, past dividend decision or payout, profitability and investment opportunities are a common set of determinants with implications for both propensity to pay dividends and its payout. The findings support theories of dividends such as signaling, outcome, catering, life cycle, FCF and pecking order.
Practical implications
The findings are important for investors, managers and future research. Investors should focus on the determinants identified by our study when making investment decisions whereas managers should practice the same when formulating appropriate dividend policies for their firms. Future research should rely on propensity to pay dividends and its payout simultaneously to promote a theoretical consensus on the dividend determinant puzzle.
Originality/value
This is the first study that investigates determinants of propensity to pay dividends and dividend payout along with short-term relationships in a single study.
Journal Article
Dividend policy and portfolio size – Swedish listed companies 1912–1978
The purpose of dividends is to distribute income to shareholders. Many stock market investors have only a few shares in their portfolios. For these investors, selling one share to generate income is not an attractive alternative to receiving dividends. We describe the dividend decision process in Sweden and provide detailed analysis of how Swedish listed companies manage dividends around new issuance of shares and stock dividends. We also examine how companies facilitate financial planning for shareholders by separating special and regular dividends, decomposing annual dividends into interest and profit, and smoothing dividends relative to earnings.
Journal Article
Board gender diversity and dividend policy in Australian listed firms: the effect of ownership concentration
We examine the association between board gender diversity and corporate dividend payout. Our results suggest that although board gender diversity impacts positively on dividend payments, this is only conspicuous in widely held firms. However, when ownership concentration is high, board gender diversity reduces dividend payments. We demonstrate that women directors have the greatest impact on dividend payments when there are three or more women on the board. Our results indicate that the financial crisis period was associated with high dividend payments; however, women directors restrained the payment of dividends during the crisis period. These results suggest that board gender diversity may be an effective CG mechanism for alleviating principal-agent conflicts but not principal-principal agency conflicts. Our results are robust to endogeneity, as well as alternative proxies and estimation techniques.
Journal Article
Is the Implementation of the Taxation Omnibus Law Important for Dividend Policy?
This study investigates the impact of the implementation of Indonesia’s Taxation Omnibus Law on corporate dividend policy, with a particular focus on the moderating role of institutional ownership. Utilizing panel data regression with a Random Effects Model approach, the analysis is conducted on 37 companies listed in the LQ-45 index over the period 2017–2024. The empirical findings reveal that the tax reform positively influences dividend yield, yet has no significant effect on dividend per share (DPS). Moreover, the interaction between institutional ownership and tax reform weakens the impact of the reform on DPS. Theoretically, these results highlight that the effectiveness of tax policy reforms is contingent upon a firm’s ownership structure. From a policy perspective, the findings underscore the need for targeted tax incentives that align with corporate governance characteristics to effectively influence dividend distribution decisions. The novelty of this research lies in its focus on the Taxation Omnibus Law and its implications for dividend payout behavior, while incorporating institutional ownership as a moderating variable—an area that has received limited attention in prior studies on tax reform and corporate financial policy.
Journal Article
The influence of cost of debt, cost of equity and weighted average cost of capital on dividend policy decision: evidence from non-financial companies listed on the Frankfurt Stock Exchange
Non-financial companies listed on the Frankfurt Stock Exchange face considerable difficulties due to expensive funding and the need to make complex decisions about their capital structure. These problems impact their judgments about dividend policy, resulting in ambiguity and possible inefficiency. This study draws on the bird-in-hand theory to investigate the influence of the cost of capital on dividend policy decisions among non-financial firms listed on the Frankfurt Stock Exchange, focusing on 227 companies from 2005 to 2022. The data for this study were sourced from Thomson Reuters Datastream. Employing the common shock autoregressive distributed lag (CS-ARDL) and two-step generalized method of moments (GMM) estimations, findings reveal that the cost of debt consistently negatively impacts dividend payouts and coverage ratios. In contrast, the cost of equity has an insignificant effect. Conversely, the weighted average cost of capital positively influences dividend payouts and coverage ratios but negatively influences dividend yield. All the findings supported the bird-in-hand theory except for the negative impact of WACC on dividend yield. These insights highlight the importance of considering the cost of capital and market share dynamics in dividend policy formulation. Firms should prioritize efficient debt management to sustain dividend distributions, and aligning dividend policies with overall capital structure management is crucial in this regard, providing a sense of reassurance and confidence to the firms and their stakeholders. This study provides valuable guidance for financial decision-makers navigating dividend-related strategies within corporate environments.
Journal Article
The COVID-19 Pandemic and Corporate Dividend Policy
This article shows that, for major equity markets, the proportion of index values attributable to the first 5 years of dividends dropped substantially in the first quarter of 2020 and that this drop was not reversed by the end of the year. In the cross section, this breakdown of dividend smoothing due to COVID-19 was less severe for firms with higher operating cash flows and more positively coskewed stock returns, and it was more pronounced for those with higher leverage and in the financial sector. Heavy dividend cutters also experienced a substantial increase in exposure to systematic risk.
Journal Article
Do Co-Opted Directors Influence Dividend Policy?
We explore how co-opted directors affect dividend policy. Co-opted directors are those appointed after the incumbent chief executive officer (CEO) assumes office. Our results show that coopted directors lead to a weaker propensity to pay dividends and, for dividend-paying firms, significantly lower dividend payouts. We also show that board co-option has more explanatory power for dividend policy than does the traditional measure of board effectiveness, that is, board independence. Exploiting the passage of the Sarbanes-Oxley Act as a natural experiment, we show that the effect of board co-option on dividend policy is more likely causal, rather than merely an association.
Journal Article