The Relationship Between Dividend Payment Patterns and Firm Characteristics

Abstract

This chapter investigates the relationship between financial measures and dividend payout policy choices of firms. We examine why firms choose to pay dividends continuously, intermittently, or not pay them. Specifically, the findings provide evidence that firms with relatively larger debts tend to pay dividends less frequently than firms with smaller debts.

The results also suggest that good financial performers are more likely to pay dividends more regularly. Additionally, the results of this study indicate that highly leveraged firms tend to make less frequent payouts than lowly leveraged firms.

Overall, this research adds to our understanding of firms’ dividend payout policy choices. First, evidence on the relationship between the various types of financial measures and firms’ choice of dividend payout frequencies should be useful to investors. Second, the findings of this study provide financial statement users with useful information about the firm’s dividend payout patterns. Third, in general, it also adds to the accounting and finance literature on dividends.

Citation

Bae, B. and Elhusseiny, M.F. (2017), "The Relationship Between Dividend Payment Patterns and Firm Characteristics", Growing Presence of Real Options in Global Financial Markets (Research in Finance, Vol. 33), Emerald Publishing Limited, Leeds, pp. 33-42. https://doi.org/10.1108/S0196-382120170000033003