A Study on Factors Determining Dividend Policy in Banking Industry

Abstract

The increasing globalization of financial markets has heightened interest in emerging markets. However, much of the research in accounting and finance has focused on developed markets. The company may distribute profits in the form of either regular cash dividends or it may distribute profits in the form of shares dividends to shareholders. Trend analysis for the Banking industry over the last 12 years with all the above mentioned variables has significant relationship with the trend estimation except in respect of a few variables like Net worth, Return On Capital Employed and Dividend Payout Ratio. These variables do not have significant relationship with the projected values. The outcome of the research will help the finance managers in dividend decisions. Companies that want to achieve a target payout ratio can use the models developed in this research to manage the important determinants that have been identified in the result and achieve the desired result.