FACTORS OF CORPORATE DIVIDEND POLICY FORMATION AND THEIR ROLE
Abstract
The dividend policy of corporations is, without exaggeration, one of the most complex and controversial issues in the theory and practice of financial management. Numerous studies have failed to provide a clear answer either regarding the optimal dividend size or the impact of dividend policy on corporate value. The purpose of this study is to quantitatively assess the effect of net profit margin on the Dividend Payout Ratio (DPR). The analysis is based on a sample of 129 publicly listed companies in the EU and the United Kingdom using 2024 data. An analysis of the impact of several indicators on the dividend payout ratio was carried out: net profit margin, return on assets ratio, and return on equity ratio. The interdependence between the dividend payout ratio, dividend yield, and dividends per share was determined. Conclusions were made regarding the key factors that influence corporations' decisions on dividend payments and their size.
References
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Lintner О. Dividends, Earnings, Leverage, Stock Prices and the Supply of Capital to Corporations. Review of Economics and Statistics.1962. No. 8. Pp. 243-269.
Gordon M. Optimal Investment and Financing Policy. Journal of Finance. 1963. No. 5. Pp. 264-272.
Jensen M. Agency cost and free cash flow, corporate finance, and takeovers. American Economic Review. 1986. No. 76. Pp. 323-329.
Fama E., French K. Disappearing Dividends: Changings Firm Characteristics or Lower Propensity to Pay? Journal of Financial Economics. 2001. Vol. 60, No. 1. Pp. 3-43.
Miller M., Rock K. Dividend Policy under Asymmetric Information. Journal of Finance. 1985. No. 4. Pp. 1031-1051.
Baker M., Wurgler J. Appearing and disappearing dividends: the link to catering incentives. Journal of Financial Economics. 2004. No. 73. Pp. 271-288.
Hariem A. Profitability and leverage as determinants of dividend policy: Evidence from Turkish financial firms. MPRA Paper 112134. University of Sulaimani. 2021. Pp. 1-14.
Njoku O., Lee Y. The interaction effect of leverage and dividend policy on firm value: : Empirical Evidence from Nigerian Firms. Journal of Corporate Accounting & Finance. 2024. No. 35. Pp. 64-79.
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