Business Excellence, Vol. 4 No. 1, 2010.
Preliminary communication
FACTORS AFFECTING DIVIDEND POLICY: EMPIRICAL EVIDENCE OF IRAN
Mehdi Moradi
; Faculty of Economics and Administrative Sciencies, Ferdowsi University of Mashhad, Iran
Mahdi Salehi
; Faculty of Economics and Administrative Sciences, Ferdowsi University of Mashhad, Iran
Shahnaz Honarmand
; Al-Zahra University, Teheran, Iran
Abstract
Dividend policy involves extremely important fi nancial decisions which serve as a
basis of numerous theories. However, these theories have been developed in diff erent fi elds,
and according to some evidence this policy remains a kind of dilemma in the fi nancial
cycles of corporations. Th us we deal with them as one of the ten most crucial problems
of corporations. Th e aim of this study is to elaborate a model which would enable us to
examine the eff ects of dividends in relation to profi tability, size, beta rate, the rate of retained
earning, P/E, and debt ratio. In other words, our aim is to fi nd an answer to this
question: Do these above mentioned factors aff ect the dividend policy in Iran or not? Th is
research covers all listed companies in the Tehran Stock Exchange between 2000 and 2008.
According to the results of the study there is a direct relationship between dividend and
profi tability. However, the results also reveal that there is a reverse relationship of these
factors with P/E, beta rate and debt ratio. Furthermore, the results of the study show that
there is no meaningful relationship between the dividend policy and a company’s size and
rate of retained earning.
Keywords
dividend policy; size; beta rate; retained earning; P/E
Hrčak ID:
60992
URI
Publication date:
30.6.2010.
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