The depreciation allowance, however, is higher in the manufacturing industries than the service industry which, in turn, can impact on dividend payout ratios. In the present study, therefore, the depreciation was added back into the net income in order to net out the impact of depreciation on the dividend payout ratios. In addition, we used the market price of the share from the beginning of the year instead of current share price. The variables, together with theoretical predictions as to the direction of their influence on dividend payout ratios are summarized in Table 1.DETERMINANTS OF DIVIDEND PAYOUT RATIOS Among factors that may be instrumental in affecting the dividend payout decision, based on the literature we can mention the followings:Corporate Profitability Corporate profitability has long been regarded as the primary indicator of a firm's capacity to pay dividends. Linter [8] and Baker et al. [9] indicate that the dividend payment pattern of a firm is influenced by the current year’s earnings and previous year’s dividends. Baker et al. [9] found that the anticipated level of future earnings is the determinant of dividend payment. Pruitt and Gitman [10] in their study report that current and past years'profits are important factors in influencing dividend payments. Baker and Powell [11] concluded from their survey of NYSE-listed firms that dividend determinants are industry specific and anticipated level of future earnings is the major determinant. Amidu and Abor [1] found a positive relationship between corporate profitability and dividend payout ratios. Anil and Kapoor [2] indicate that profitability has always been considered as a primary indicator ofdividend payout ratio. Brook et al. [12] explicitly stated that there is no reason to believe that corporate dividend policy is driven by a single goal.
đang được dịch, vui lòng đợi..