Abstract

http://ssrn.com/abstract=2151676
 
 

Citations



 


 



Why Firms Do Not Pay Dividends: The Canadian Experience


H. Kent Baker


American University - Kogod School of Business

Bin Chang


University of Ontario Institute of Technology

Shantanu Dutta


The University of Ontario Institute of Technology (UOIT)

Samir Saadi


Queen's School of Business

September 24, 2012

Forthcoming in Journal of Business Finance and Accounting (JBFA)

Abstract:     
We use a survey approach to investigate the factors leading to the decision not to pay cash dividends in Canada. Our results show that Canadian managers perceive growth opportunities, low profitability, and cash constraints as the major underlying reasons for a firm’s decision not to pay dividends. Questionnaire results also show that, for non-dividend-paying firms, taxation is at best a second-order determinant of dividend policy and that stock repurchases are not substitutes for dividends. Finally, our findings are inconclusive regarding managers’ views on the relationship between dividend policy and stock prices and the signaling role of dividend policy.

Keywords: Dividend policy, cash dividends, taxation, stock repurchase

JEL Classification: G35

Accepted Paper Series


Not Available For Download

Date posted: September 25, 2012  

Suggested Citation

Baker, H. Kent and Chang, Bin and Dutta, Shantanu and Saadi, Samir, Why Firms Do Not Pay Dividends: The Canadian Experience (September 24, 2012). Forthcoming in Journal of Business Finance and Accounting (JBFA). Available at SSRN: http://ssrn.com/abstract=2151676

Contact Information

H. Kent Baker
American University - Kogod School of Business ( email )
4400 Massachusetts Avenue NW
Washington, DC 20816-8044
United States
202-885-1949 (Phone)
202-885-1992 (Fax)
Bin Chang
University of Ontario Institute of Technology ( email )
2000 Simcoe Street North
Oshawa, Ontario M5J2N3
Canada
Shantanu Dutta
The University of Ontario Institute of Technology (UOIT) ( email )
2000 Simcoe Street North
Oshawa, Ontario L1H 7K4
Canada
Samir Saadi (Contact Author)
Queen's School of Business ( email )
Queen's University
Kingston
Ontario, Ontario K7L 3N6
Canada

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