Abstract

http://ssrn.com/abstract=1867977
 
 

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Determinants of Dividend Payments


Kate Brown


University of Maryland Eastern Shore - School of Business and Technology

Vichet Sum


University of Maryland Eastern Shore - School of Business and Technology

August 1, 2010

International Journal of Applied Accounting and Finance, Vol. 1, No. 1, 40-46, 2010

Abstract:     
This paper explores the contribution of various financial measures in explaining the variability in a firm’s dividend payments. Ordinary least squares analysis of data from 2003 to 2007 shows that approximately 71% of the variability in dividend payments is explained by the firm’s expected growth rate of revenues, earnings before interest and tax, market debt to capital ratio, and effective tax rate. The findings support theories in the literature that dividends paid by a firm decrease with higher expected growth in revenues, lower earnings before interest and tax, higher debt service requirements, and higher effective tax rates.

Number of Pages in PDF File: 7

Keywords: Dividend Payments, EBIT, Market Debt to Capital Ratio, Expected Growth Rate in Revenues, Effective Tax Rate

JEL Classification: G30, G35, G39

Accepted Paper Series


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Date posted: June 23, 2011 ; Last revised: June 24, 2011

Suggested Citation

Brown, Kate and Sum, Vichet, Determinants of Dividend Payments (August 1, 2010). International Journal of Applied Accounting and Finance, Vol. 1, No. 1, 40-46, 2010. Available at SSRN: http://ssrn.com/abstract=1867977

Contact Information

Kate Brown (Contact Author)
University of Maryland Eastern Shore - School of Business and Technology ( email )
2105 Kiah Hall
Princess Anne, MD 21853
United States
410-651-7596 (Phone)
410-651-6032 (Fax)
HOME PAGE: http://www.umes.edu/bma/Brown.html
Vichet Sum
University of Maryland Eastern Shore - School of Business and Technology ( email )
2105 Kiah Hall
Princess Anne, MD 21853
United States
410-651-6531 (Phone)
410-651-6529 (Fax)
HOME PAGE: http://www.umes.edu/bma/Sum.html
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