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Determinants of dividend policy of foreign listed companies on Karachi Stock Exchange

Khan, Faisal and Ahmad Anuar, Melati and Lim, Guan Choo and Jadoon, Imran Abbas and Jamil, Ahmed (2011) Determinants of dividend policy of foreign listed companies on Karachi Stock Exchange. Australian Journal of Basic and Applied Sciences, 5 (12). pp. 2917-2928. ISSN 1991-8178

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Abstract

This paper reports the empirical findings of a questionnaire survey about corporate dividend policy addressed to finance directors of foreign listed companies listed on Karachi stock exchange. We survey 60 foreign listed companies and the questionnaire is asked from their finance directors like earlier studies (for example, Brav et al ., 2005 in the US and Dhanani, 2005 in the UK) in order to visualize their view and understanding about the dividend decision. Our survey resulted into some very important points to be noted. The dividend decision is influenced by market price of share, dividend growth and smoothening of dividend. The firms give importance to the dividend as it was in past and the growth is considered at time of declaration of dividend. The alternative of dividend is investment consideration and the firms always issue dividend to attract the retail investors at top priority. Rather than reducing dividends, the firms would raise new funds to undertake investments. The dividend decision is influenced by the competitor policy and the fear of signaling of shortage of profitable investment. The results demonstrate that foreign listed companies are more concerned with dividend policy.

Item Type:Article
Uncontrolled Keywords:cash dividends, signaling hypothesis
Subjects:H Social Sciences > HG Finance
Divisions:Management and Human Resource Development (Formerly known)
ID Code:44840
Deposited By: Haliza Zainal
Deposited On:21 Apr 2015 11:31
Last Modified:14 Sep 2017 12:32

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