Phd scholor, university of sindh Jamshoro
my reserach is about to see whether dividend policy has impact or not on stock prices in pakistan
Management science is different from natural science in the sense that it has multiple views on particular subject or point because judgment, perception and observation of individual vary from one to another. Dividend policy is one of the topics which are very much debated since many decades but some circumstances and facts entangling the topic.When companies earn profit they have two options either to pay dividend or retain the amount for their future project needs. Now the puzzle is, whether to pay dividend or not? If yes, then how much dividend is to pay? Companies pay dividend for purpose to satisfy the shareholders but at the same time they will have to borrow money from outside to fulfill their future projects needs. Dividend policy has also serious impact on other decisions like investment and financing, so the optimum dividend policy will expand the abundance of shareholders who are keen to get dividend and capital gain at the same time There are numerous reasons to study dividend policy in Pakistan.Much work has been done so far round the world, but very nominal work has been done in Pakistan regarding dividend policy, consequently need arises of comprehensive examination of the impact of dividend policy on the market prices of shares in Pakistan
Abstract: Publication date: Available online 16 November 2016 Source:Journal of Banking & Finance Author(s): Nicos Koussis, Spiros H. Martzoukos, Lenos Trigeorgis We examine optimal liquidity (retained earnings) and dividend choice incorporating debt financing with risk of default and bankruptcy costs as well as growth options under revenue uncertainty. We revisit the conditions for dividend policy irrelevancy and the broader role of retained earnings and dividends. Retained earnings have a net positive impact on firm value in the presence of growth options, high external financing costs and low default risk. High levels of retained earnings enhance debt capacity but have a negative effect on equity value due to the likelihood of losing accumulated cash balances in case of default, unless offset by high external financing costs. Opposite directional effects of retained earnings on equity and debt create a U-shaped relation with firm value. The framework is extended to analyze management-shareholder conflicts, demonstrating that managers accumulate higher than optimal cash.
Pub.: 20 Nov '16, Pinned: 15 Oct '17
Abstract: This paper examines whether dividend policy is associated with earnings management and whether the relationship varies across countries with wide-ranging degrees of institutional strength and transparency. Based on a sample of 23,429 corporations from 29 countries, we show that dividend payers manage earnings less than dividend non-payers, and that this evidence is stronger in countries with weak investor protection and high opacity. Further, we find that dividend payers manage earnings less when they issue equity following dividend payments, and that this result is more pronounced in countries with weak institutions and low transparency. Overall, our evidence suggests that firms may employ dividend policies associated with less earnings manipulation to mitigate agency concerns and to establish credible reputation, thereby facilitating access to external funds.
Pub.: 27 Nov '16, Pinned: 15 Oct '17
Abstract: Publication date: Available online 23 December 2016 Source:Journal of Multinational Financial Management Author(s): Julie Byrne, Thomas O’Connor We study how creditor rights and culture interact with one another to influence corporate dividend payout policy. Where creditor rights are strong, creditors accept the status quo, which are large dividends in individualist and small dividends in collectivist traditions, respectively. Culture influences dividend payout where creditor rights are weak. In collectivist countries where group cohesion among corporate stakeholders results in perceived lower agency costs of debt and equity, creditors place few if any restrictions on dividend payout given weak creditor rights. In contrast, in individualist traditions, creditors continue to restrict dividend payouts under weak creditor rights. Our findings emphasize the importance of accounting for the interactions between creditor rights and culture in determining dividend policy.
Pub.: 27 Dec '16, Pinned: 15 Oct '17
Abstract: Authors: María Consuelo Pucheta-Martínez, Blanca López-Zamora Article URL: http://www.tandfonline.com/doi/full/10.1080/10293523.2016.1253136?ai=1ipep&mi=kpptjb&af=R Citation: Investment Analysts Journal Publication Date: 2016-12-08T06:08:28Z Journal: Investment Analysts Journal
Pub.: 08 Dec '16, Pinned: 15 Oct '17
Abstract: A combined dividend and risk control problem is presented and investigated in this paper. The risk of the insurance firm is controlled by using a proportional reinsurance policy. It is considered that the evolution of the cash reserves of the firm is driven by a generalised Itô-;Lévy process. The surplus cash reserves earn interest at a constant rate. The objective of the firm is to maximise the total expected discounted dividends paid out to share holders. The situation is modelled as an impulse-;classical control problem. We manage to construct the value function and the optimal impulse control. The existence and uniqueness of an optimal classical control is proved.
Pub.: 07 Dec '16, Pinned: 15 Oct '17
Abstract: We investigate the governance role of conservative accounting in mitigating the creditor–stockholder conflict by affecting firms’ dividend policies, and how the convergence to International Financial Reporting Standards (IFRS) affects the governance role of conservative accounting as it relates to dividend policy. We analyze data on Chinese listed firms from 2000 through 2011. The use of conservative accounting reduced cash dividend payouts, thereby playing a governance role by mitigating the firm's creditor–stockholder agency conflict. However, China's convergence to IFRS reduced the governance role of conservative accounting on dividend policy by reducing the accounting conservatism of listed firms in China.
Pub.: 23 Mar '17, Pinned: 15 Oct '17