Impact of dividend policy on shareholders wealth and firm performance in Pakistan

In the field of corporate finance the question as to whether dividend policy affects the shareholders wealth still remains unresolved. The objective of this research paper is to establish the impact of dividend policy on shareholders’ wealth and firm performance in Pakistan. The conduct of dividend...

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Autores principales:	Khadija Farrukh, Sadia Irshad, Maria Shams Khakwani, Sadia Ishaque, Nabeel Younus Ansari
Formato:	article
Lenguaje:	EN
Publicado:	Taylor & Francis Group 2017
Materias:	dividend policy shareholders wealth firms performance earning per share share price returns on equity Business HF5001-6182 Management. Industrial management HD28-70
Acceso en línea:	https://doaj.org/article/97ff1abfaedf4d73b9ced9df4a5ab9cb
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spelling	oai:doaj.org-article:97ff1abfaedf4d73b9ced9df4a5ab9cb2021-12-02T10:44:30ZImpact of dividend policy on shareholders wealth and firm performance in Pakistan2331-197510.1080/23311975.2017.1408208https://doaj.org/article/97ff1abfaedf4d73b9ced9df4a5ab9cb2017-01-01T00:00:00Zhttp://dx.doi.org/10.1080/23311975.2017.1408208https://doaj.org/toc/2331-1975In the field of corporate finance the question as to whether dividend policy affects the shareholders wealth still remains unresolved. The objective of this research paper is to establish the impact of dividend policy on shareholders’ wealth and firm performance in Pakistan. The conduct of dividend policy has been one of the most debatable issues in literature of corporate finance. Numerous researchers have attempted to reveal issues with respect to the dividend policy, however, we still don’t have a worthy explanation regarding the behavior of dividend policy. The variables used in this research are dividend policy, shareholders wealth, and firm performance. Dividend per share and dividend yield are used to measure dividend policy. For shareholders wealth, earning per share and share price are used as proxies. Return on equity is used to measure firm performance. From the regression result, it is found out that dividend policy has positively significant impact on shareholders’ wealth and firm performance. This study supported dividend relevance theory, signaling effect theory, bird in hand theory and clientele-effect theory. The study commends the implementation of stable, effective, managed and target-oriented dividend policy by firm’s financial managers along with effective supervisory framework governed by capital market regulatory bodies to uplift firms’ performance and shareholders wealth in Pakistan. Furthermore, appropriate firm disclosure with respect to dividend payout and dividend per share is needed to guard the potential investors in making the right investment choices in listed firms.Khadija FarrukhSadia IrshadMaria Shams KhakwaniSadia IshaqueNabeel Younus AnsariTaylor & Francis Grouparticledividend policyshareholders wealthfirms performanceearning per shareshare pricereturns on equityBusinessHF5001-6182Management. Industrial managementHD28-70ENCogent Business & Management, Vol 4, Iss 1 (2017)
institution	DOAJ
collection	DOAJ
language	EN
topic	dividend policy shareholders wealth firms performance earning per share share price returns on equity Business HF5001-6182 Management. Industrial management HD28-70
spellingShingle	dividend policy shareholders wealth firms performance earning per share share price returns on equity Business HF5001-6182 Management. Industrial management HD28-70 Khadija Farrukh Sadia Irshad Maria Shams Khakwani Sadia Ishaque Nabeel Younus Ansari Impact of dividend policy on shareholders wealth and firm performance in Pakistan
description	In the field of corporate finance the question as to whether dividend policy affects the shareholders wealth still remains unresolved. The objective of this research paper is to establish the impact of dividend policy on shareholders’ wealth and firm performance in Pakistan. The conduct of dividend policy has been one of the most debatable issues in literature of corporate finance. Numerous researchers have attempted to reveal issues with respect to the dividend policy, however, we still don’t have a worthy explanation regarding the behavior of dividend policy. The variables used in this research are dividend policy, shareholders wealth, and firm performance. Dividend per share and dividend yield are used to measure dividend policy. For shareholders wealth, earning per share and share price are used as proxies. Return on equity is used to measure firm performance. From the regression result, it is found out that dividend policy has positively significant impact on shareholders’ wealth and firm performance. This study supported dividend relevance theory, signaling effect theory, bird in hand theory and clientele-effect theory. The study commends the implementation of stable, effective, managed and target-oriented dividend policy by firm’s financial managers along with effective supervisory framework governed by capital market regulatory bodies to uplift firms’ performance and shareholders wealth in Pakistan. Furthermore, appropriate firm disclosure with respect to dividend payout and dividend per share is needed to guard the potential investors in making the right investment choices in listed firms.
format	article
author	Khadija Farrukh Sadia Irshad Maria Shams Khakwani Sadia Ishaque Nabeel Younus Ansari
author_facet	Khadija Farrukh Sadia Irshad Maria Shams Khakwani Sadia Ishaque Nabeel Younus Ansari
author_sort	Khadija Farrukh
title	Impact of dividend policy on shareholders wealth and firm performance in Pakistan
title_short	Impact of dividend policy on shareholders wealth and firm performance in Pakistan
title_full	Impact of dividend policy on shareholders wealth and firm performance in Pakistan
title_fullStr	Impact of dividend policy on shareholders wealth and firm performance in Pakistan
title_full_unstemmed	Impact of dividend policy on shareholders wealth and firm performance in Pakistan
title_sort	impact of dividend policy on shareholders wealth and firm performance in pakistan
publisher	Taylor & Francis Group
publishDate	2017
url	https://doaj.org/article/97ff1abfaedf4d73b9ced9df4a5ab9cb
work_keys_str_mv	AT khadijafarrukh impactofdividendpolicyonshareholderswealthandfirmperformanceinpakistan AT sadiairshad impactofdividendpolicyonshareholderswealthandfirmperformanceinpakistan AT mariashamskhakwani impactofdividendpolicyonshareholderswealthandfirmperformanceinpakistan AT sadiaishaque impactofdividendpolicyonshareholderswealthandfirmperformanceinpakistan AT nabeelyounusansari impactofdividendpolicyonshareholderswealthandfirmperformanceinpakistan
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Impact of dividend policy on shareholders wealth and firm performance in Pakistan

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