EVALUATION OF THE DIVIDEND PRACTICES AMONG SELECTED NIGERIAN QUOTED FIRMS

BY DR. S. L. ADEYEMI DEPARTMENT OF BUSINESS ADMINISTRATION UNIVERSITY OF ILORIN, ILORIN AND A. A. ADEWALE DEPARTMENT OF ACCOUNTING AND FINANCE UNIVERSITY OF ILORIN ABSTRACT Dividend policy is a pivot around which other financial policies rotate, hence central to the performance and valuation of listed firms. This is moreso because managers as decision makers are often confronted with the dividend puzzle - the problem of reconciling observed dividend behaviour with economic incentives. This paper is motivated by the apparent dearth of empirical works on dividend policies and practices in Nigeria and hence aims to evaluate such policies and practices among selected Nigerian quoted firms. The result of the survey questionnaires show that Nigerian investors attitudes are consistent with those of the bird-in-the-hand theorists. Hence Nigerian managers belief that dividend payout have significant signaling effect both on share price and future prospects of a firm. Consequently, they strive to maintain a consistent and uninterrupted dividend payout policy. INTRODUCTION No doubt, one of the most important policies in corporate financing is the dividend policy. This is not only from the viewpoint of the company, but also from that of the shareholders, the consumers, the workers, the regulatory bodies and the government. The relative importance of this policy stems from the fact that it is a pivotal policy around which other financial policies rotate, hence central to the performance and valuation of firms (Bebczuk, 2004). According to

Olowe (1998), financial managers make inter-alia three decisions pertaining to financing, investment and dividends simultaneously. While financing decision is influenced by the dividend decision through retained earnings, the investment decision depends on the amount of retained earnings and the amount that can be raised externally. Though a very important financial policy, the dividend policy remains one of the most puzzling issues in corporate finance (Baker, Powell, and Veit, 2002: 255). According to Desai, Foley and Hines Jr. (2001) a major impediment to understanding corporate dividend policy is the availability of multiple plausible explanations for observed behaviour. Among the principal explanations stressed by modern theories include agency and other informational problems between owners and managers (Bebczuk, 2004). Thus, while the shareholders use dividends to wrest resources from the control of managers, corporate managers on the other hand use dividends to send credible profitability signals to the capital market. Dividend payments reduce the free cash flows under the discretion of the corporate members [the controlling owners and top management] and this help alleviate expropriation of minority shareholders [Hwang, Park and Park, 2004]. Hence the need to control corporate managers is often invoked to explain the existence of large and frequent dividend payments from corporations to common shareholders [Desai et al, 2001]. On the other hand, information asymmetries between managers and shareholders necessitates that the former focus attention on the information content of dividends that are conveyed to the latter regarding future earnings or cash flows. The above explanation is succinctly put by Rigar and Mansouri (2003): Policy of dividends practiced by a corporation is a robust signal of a firms value, even though relationship between the two variables does not meet unanimity of theoretical and empirical research. Indeed, generous distribution of profits in favour of shareholders may be considered as a signal of treasury ease as it can be interpreted as revealing obstacles at the level of investment horizons. Similarly, maintaining profits to be reinvested is an action that is generally less appreciated by shareholders, and often badly interpreted by the market, especially in the case of listed companies, but this may also be considered as a signal of strong growth potentials.

Therefore, the following research questions are addressed in this paper. What effects does dividend have on share value? How does the dividend policy impact on both the clientele and signaling effects? What are the firms attitude on both Litners findings and the residual policy? And what are the determinants of dividend policy? The aim is to draw on the synthesis of these questions, drawing on responses to survey questionnaires administered on corporate respondents. The remaining parts of this paper is structured as follows: In the next section a brief review of past studies on the dividend policy and practices is attempted. Afterwards, the research methodology adopted in the study is described, and thereafter the discussion of results is presented. The last section contains some conclusion drawn from the study. DIVIDEND POLICY: ISSUES AND CHALLENGES Reviews of past studies show that finance scholars have engaged in different empirical and critical studies on dividend policy. In his seminal paper, Litner (1956) concluded that a major portion of dividend of a firm would be expressed in terms of the firms desired dividend payment and target pay out ratio. Together with other early proponents of the bird-in-the-hand theory, like Gordon (1959), they contend that shareholders prefer dividends to the capital gains that would be expected to result from the reinvestment of earnings by the firm. On the basis of interviews conducted with United States [U.S] corporate executives, Litner (1956) found that firms behave as though dividend policy matters by selecting target payout ratios based on earnings to which they gradually adjust actual dividend payments over time. He latter hypothesized a lagged adjustment model that relates changes in dividends to both current earnings and lagged past dividends and found out that they positively influence current dividends. Various finance scholars in United State [U.S] like Fama and Babiak (1968), Baker, Farrelly and Edelman (1985), Pinegar and Wilbricht (1989) have attempted an empirical test of Litners behavioural model or its variations over the years. Similar studies were carried out in Australia by Shevlin (1982), in Singapore by Ariff and Johnson (1989) etc. Generally, the results of these studies are consistent with Litners hypothesized partial adjustments towards target payout ratio. In their surveys of the Chief Executive Officers (CEOs) of listed firms in Australia; Hong Kong; Indonesia; Malaysia; the Philippines and Singapore; Kester et al (1998) found that executives in these countries belief that firms should have target pay out ratios, strive for

uninterrupted dividend payments, and avoid changes in dividend that may have to be reversed. These findings are consistent with those of Arsiraphongphisit, et al (2003) in their survey of Chief Executive Officers (CEOs) in Thailand. An alternative view to the bird-in-the-hand theory is the Dividend Irrelevance Theory advanced by Miller and Modigliani (1961) in their seminal theoretical paper. They advanced the view that the value of a firm depends solely on its earning power and is not influenced by the manner in which its earnings are split between dividends and retained earnings. They further argued that when financial markets are frictionless, investors are indifferent between dividends and capital gains as far as they can substitute one for the other to reach their desired level of cash dividends by selling or buying stock. This assertion is supported by the findings of Fama and French (2001) that the proportion of dividend paying firms among U.S quoted firms has been declining overtime, thus implying a decline in the perceived benefits of dividends. Furthermore, Karak (1993) examined the policy decision regarding divisible profit and dividend decision among Indian firms. The study concludes that management in India follow conservative policies with regards to dividends. Hence, there is an increasing tendency on their part to finance expansion out of internal resources as far as possible. However, a major argument against the dividend irrelevance proposition is the difference in tax rates between dividends and capital gains. Consequently, Black (1976) coined the term dividend puzzle the problem of reconciling observed dividend behaviour with economic incentives facing the relevant decisionmakers. It could be deduced from both the bird-in-the-hand theory and the dividend irrelevance theory that potential explanations for observed dividend behaviour center on corporate control problems, signaling explanations, and the tax effects of paying dividends, with each of them carrying implications for how dividend policy is conducted. For about two decades now, quite a number of appealing alternative approaches have been offered by scholars in order to solve the dividend puzzle. Most of these approaches are rooted in asymmetric information between firm insiders and outsiders and bounded rationality of the latter. Bebczuk (2004), provides a useful survey of this literature. Among the recent hypotheses offered

is that firms use dividend payouts to signal their quality to the market (Hwang et al 2004, Rigar and Mansouri, 2003), so as to mitigate the under-valuation that arises in an adverse selection context, [Bebczuk, 2004]. Agency problems have also been advanced as another explanation for the dividend puzzle. When the goals of corporate managers diverge from those of shareholders, financial policies can be used to reduce agency costs. Desai, et al (2001), Hwang et al (2004) and Bedczuk (2004) opined that consistent dividend payments can mitigate agency conflicts by distributing investment returns and thereby reducing the scope of managerial misallocation and appropriation of corporate resources. Furthermore, Chirinko and Philips (1999) in their study of evolution policy at the Baby Bells also conclude that agency problems provide the strongest explanation in comparison to alternative explanations. Tax considerations have obvious potential to influence dividend payment to common shareholders, since dividends trigger tax obligations that might otherwise be deferred or avoided. According to Desai et al (2001), evidence indicates that firms pursue dividend pay out policies designed in part to minimize tax obligations. Furthermore, Baker and Powell (2000), Baker and Smith (2003), find that the desire to conform to the industry dividend practice is an important factor influencing dividend policy. Hence, industry affiliation can be advanced as another explanation for the dividend behavior. In a recent survey, Brav, Graham, Harvey and Michaely (2003) also found that the dividend policies of competitors are moderately influential when managers set their own dividends. Corporate governance has also been found out to influence dividend behavior. For instance, Hwang, et al (2004) find that firms that practice higher-quality governance also have favourable pay out policies to investors. Also, Bhojraj and Senguptra (2004) conclude that firms with greater institutional ownership and stronger outside board control enjoy lower bond yields and higher ratings on their new bond issues. This evidence suggests that governance mechanism can reduce cost of debt capital by mitigating agency costs and by reducing information asymmetry between the firm and the lenders (Bebczuk, 2004). Other explanations offered for the dividend patterns could be said to be behavioural in nature. An example is the investors preference for

cash dividends, such as the psychological (but necessarily rational from a purely financial standpoint) loss derived from the principal reduction of selling stock or the regret of liquidating stock just before its price rises (Bebczuk, 2004). The dividend puzzle remains yet unresolved. Consequently, finance scholars have engaged and are still engaging in different empirical studies to explain the dividend policy. However, the issue still apparently remains scarcely investigated in an emerging country like Nigeria in stark contrast to the developed countries of Europe, Asia and America. METHODOLOGY The population of focus in this study consists of top management staff of sampled firms in Nigeria. Efforts were made in some cases to ensure that the staff respondents of such firms are their Financial Managers. Survey method was adopted in the study. This method is especially useful for the study on non-observable events such as opinions, attitudes, preferences, or dispositions (Soyombo, 2002). Moreover, while survey method is not flawless, it has been generally accepted as a reasonable proxy given the time and personal constraints in large corporations (Ryan and Ryan, 2002). The research instrument used in the study is the structured questionnaire. A charge is made against surveys of this nature that the respondent is usually a junior executive with a limited viewpoint (Aggarwal, 1980). To ensure that the respondents who completed the questionnaire understand the survey, educational achievement and academic training were solicited. These two characteristics are important to assess the respondents familiarity with the subject matter. In addition, respondents were offered complete anonymity in order to improve response rate, reliability, honesty, and thus reduce response bias. A total number of 150 questionnaires were administered out of which only 51 representing 34% were received and used for analysis. The research instrument contained 14 closed ended and 1 open ended statements on dividend policy against which the respondents were asked to indicate their level of agreement upon a five point Likert scale (where 5 = strongly agree, and 1 = strongly disagree). Each statement number is subsequently referred to as S1-S14.

The data obtained were subjected to statistical analysis using both descriptive and inferential statistics. The descriptive tools used were the simple percentage, arithmetic mean and standard deviation, while the inferential statistics was the students-t test at relevant alpha levels. ANALYSIS AND FINDINGS The distribution of the respondents by demographic characteristics is presented below by educational qualification; management programmes or courses attended; work experience in years, and length of service in present company. Table 1. Demographic Characteristics of the Respondents Characteristics Educational Qualification: HND/B.Sc MBA/M.Sc/Equivalent Others Exposure to Management Programme Yes No Working Experience in Years: Less than 5 years 5-10 years 10-20 years 20 years and above Length of Working Experience in years in present company: Less than 5 years 5-10 years 10-20 years 20 years and above Source: Field Survey, 2004 Table 1 above shows that all the respondents have one form of college training or the other. 61% have above first-degree education, while 31% have at least HND or first degree. The remaining 8% have other qualifications, which include diploma, and professional qualifications. This distribution demonstrates a high level of educational attainment by the respondents. Furthermore, most of the respondents, 37 representing 73% have exposure to management development programmes and courses. This distribution with that of educational qualification indicate that the respondents are likely to be very familiar with the subject matter and thus greatly influencing 7 Respondents 16 31 4 37 14 10 29 11 1 15 20 16 0 Percent 31 61 8 73 27 20 57 22 2 29 39 32 0

their responses. Only 14 respondents representing 27% have never attended any management development course (s). Majority of the respondents, 29 representing 57% have between 5 and 10 years of working experience, while 11 respondents representing 22% have between 10 20 years of working experience. Only 1 respondent 2% has above 20 years working experience. Others representing 20% have less than 5 years experience. The quality of their responses is expected to be positively influenced by their experience. Nearly 40% of respondents have 5 10 years working experience in their present company. Another 32% have between 10 20 years while only 15 respondents representing 29% have less than 5 years working experience in their present company. This indicates that majority of the respondents do not change jobs frequently and thus should have sufficient knowledge of the dividend policies and practices of their firms. ATTITUDE ON DIVIDENDS AND SHARE VALUE According to table 2, 78% of the respondents agreed with the statement that dividend payment indeed affects share prices. While 13% were neutral, only 8% disagreed. The basic justification of the traditionalist that investors prefer dividends to capital gains was also agreed to by 72% of the respondents indicating a mild agreement. Only 14% apiece were indifferent and/or disagreed with this assertion. The mean scores of 4.27 and 3.73 out of a maximum scale of 5.00 and a standard deviation of 0.98 and 1.11 respectively also indicate respondents positive disposition towards S1 and S2. These statements were also statistically significant using students t statistic computed at an alpha level of 5% and n 1 (51-1) degree of freedom. This is so because critical value of 1.99 from table is less than the values of 12.90 and 7.92 for S1 and S2 respectively. These findings are consistent with that of Arstraphongphisit et al (2003).

Table 2: Impact of Dividends on Share Value Research Statements 5 56 24 Percentage of Responses (%) 4 3 2 1 22 13 8 0 48 14 9 5 Mean 4.27 3.73 S.D 0.98 1.11 T-Test 12.90 7.92

S1. Dividend payment affects the share price S2. Capital gains expected to result from earnings retention are riskier than dividend payments Source: Authors Computations ATTITUDE ON LITNERS FINDINGS

Table 3 shows that 55% of the respondents agreed with the statement that a firm should strive to maintain an uninterrupted dividend payout. While 15% disagreed, 30% were however, indifferent to this statement. Furthermore, 59% of the respondents agreed that changes in dividends that might have to be reversed in a year or so should be avoided. Only 15% of the respondents do not agree with this statement while 26% were indifferent. The mean scores of 3.53 and 3.59 out of a maximum scale of 5.00 and a standard deviation of 1.10 and 1.12 respectively also indicate respondents positive disposition towards S3 and S4. These statements were also statistically significant using students t- statistic computed at an alpha level of 5% and n-1 (51) degree of freedom. This is so because critical value of 1.99 from table is less than the computed values of 6.69 and 6.95 for S3 and S4 respectively. This finding is consistent with those of Pinegar and Wilbrecht (1989) who found strong evidence for managerial preference for dividend continuity among U.S. firms. Litners hypothesize model was also supported by the findings in this study. 62% of the respondents agreed that a firm should have a target payout ratio and periodically adjust its payout towards that target. 14% and 23% of the respondents disagreed with and were indifferent to this statement respectively. 45% (less than half) agreed with the statement that a change in existing dividend is more important than the actual dividend while 35% were indifferent, 20% disagreed. The mean scores of 3.63 and 3.31 out of a maximum scale of 5.00 and a standard deviation of 1.02 and 1.12 respectively also indicate respondents positive disposition towards S5 and S6. These statements were also statistically significant using students t- statistic computed at an alpha level of 5% and n-1 (51-1) degree of freedom. This is

so because critical value of 1.99 from table is less than the computed values of 7.91 and 5.17 for S5 and S6 respectively. Table 3 Attitude on Litners Findings Research Statement 5 3. A firm should strive to maintain uninterrupted dividend payment 4. A firm should avoid making changes in dividends that might have to be reversed in a year or so 5. A firm should have a target payout ratio and periodically adjust its payout toward the target. 6. A change in the existing dividend payout is more important than the actual amount of dividends Source: Authors Computations ATTITUDE ON THE SIGNALING EFFECT Changes in dividend may, due to information asymmetry between managers and investors, convey new information to the latter regarding future earnings or cash flows. Hence, the signaling effect holds that changes in dividend payout may positively or negatively impact on a firms share price, and ultimately, its prospects. On statements involving signaling effects, table 4 below shows that 80% and 81% respectively agreed that reasons for dividend policy changes should adequately be disclosed to shareholders (S7) and that dividend payment provides a signaling device of a companys future prospects (S8). 42% and 7% of the respondents disagreed with both statements, while 16% and 12% were indifferent respectively. The mean scores of 4.10 and 4.12 out of a maximum scale of 5.00 and a standard deviation of 0.84 and 0.91 respectively also indicate respondents positive disposition towards S7 and S8. These statements 11 34 35 11 9 3.31 1.12 5.17 20 42 23 13 1 3.63 1.02 7.91 19 21 36 38 30 26 10 10 5 5 3.53 3.59 1.10 1.12 6.69 6.95 Percentage of Responses (%) 4 3 2 1 Mean S.D T-Test

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were also statistically significant using students t-statistic computed at an alpha level of 5% and n 1 (51-1) degree of freedom. This is so because critical value of 1.99 from table is less than the computed values of 13.61 and 12.72 for S7 and S8 respectively. This findings is consistent with those of Hwang et al (2004) and Bebczuk, (2004) who found out that firms use dividend payouts to signal their quality to the market so as to mitigate the under valuation that arises in an adverse selection context. On the statement that the market uses dividends announcements as information for assessing security values, 54% agreed, 11% disagreed, while 35% were neutral. The mean score of 3.59 out of a maximum scale of 5.00 and a standard deviation of 1.05 respectively also indicates respondents positive disposition towards S9. This statement was also statistically significant using students t-statistic computed at an alpha level of 5% and n 1 (511) degree of freedom. This is so because critical value of 1.99 from table is less than the computed values of 7.41 for S9. This findings is consistent with those of Arsiraphongphisit et al (2003). Table 4: Attitude on Signaling Effect Research Statement 5 7. Reasons for dividend policy changes should be adequately disclosed to investors 8. Dividend payments provide a signaling device of future company prospects 9. The market uses dividend announcements as information for assessing security values Source: Authors computations 42 40 18 38 41 36 16 12 35 4 7 6 0 0 5 4.10 4.12 3.59 0.84 0.91 1.05 13.61 12.72 7.41 Percentage of Responses (%) 4 3 2 1 Mean S.D T-Test

ATTITUDE ON THE CLIENTELE EFFECT The clientele effects offer another explanation for dividend stability. It describes a firms tendency to attract its own clientele of investors partially due to its dividend payout policy. Table

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5 shows that 68% of the respondents agreed with the statement that management should be responsive to its shareholders preference regarding dividends while only 2% disagreed. However, 30% were neutral on this statement. The mean score of 3.84 out of a maximum scale of 5.00 and a standard deviation of 0.80 respectively also indicate respondents positive disposition towards S10. This statement was also statistically significant using students tstatistic computed at an alpha level of 5% and n 1 (51-1) degree of freedom. This is so because critical value of 1.99 from table is less than the computed values of 11.96 for S10. This finding corroborates that of Shleifer and Vishny (1986) and Allen, Bernado and Welch (2000) who noted that institutional investors prefer dividend payments, and argue further that large investors are often attracted to provide important monitoring services in order to mitigate agency problems. On the statement that investors basically differ between preference for capital gains or dividends, 58% of the respondents indeed agreed, while 23% disagreed. However, only 19% were indifferent. Thus implying that investors are not indifferent between returns from dividends versus those from capital gains. The mean score of 3.66 out of a maximum scale of 5.00 and a standard deviation of 1.20 respectively also indicate respondents positive disposition towards S11. This statement was also statistically significant using students t-statistic computed at an alpha level of 5% and n 1 (51-1) degree of freedom. This is so because critical value of 1.99 from table is less than the computed values of 6.90 for S11. This finding is consistent with those of Arsiraphongphisit et al (2003). S 12 is similar to S2 both in terms of statement and statistic hence was not subjected to another analysis.

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Table 5: Attitude on the Clientele Effect. Research Statement 5 10. Management should be responsible to its shareholders preference regarding dividends 11. Investors are basically different between returns from dividends versus those from capital gains 12. Capital gains expected to result from earnings retention are riskier than dividend expectations Source: Authors Computations ATTITUDE ON RESIDUAL POLICY According to Arsiraphongphisit et al (2003), depending upon the timing and magnitude of earnings and investment opportunities available to the firm, strict adherence to the residual policy on a year-to-year basis result in an erratic pattern of dividends. On the statement that new capital investment requirements of the firm generally have little effect on modifying dividend behaviour, 30% of the respondents agreed, while 35% were neutral. 35% however, disagreed indicating that no strong agreement was made on this statement. The mean score of 3.02 out of a maximum scale of 5.00 and a standard deviation of 1.02 respectively also indicate respondents positive disposition towards S13. This statement was also statistically significant using students t-statistic computed at an alpha level of 5% and n 1 (51-1) degree of freedom. This is so because critical value of 1.99 from table is less than the computed values of 3.64 for S13. The statement on whether dividend policy should be viewed as a residual after financing deserved level of investments from available earnings was agreed with by 74% of the respondents, while 16% and 10% were neutral, and disagreed respectively. The mean score of 3.88 out of a maximum scale of 5.00 and a standard deviation of 1.02 respectively also indicate respondents positive disposition towards S14. This statement was also statistically significant using students 22 46 14 11 7 4.06 1.51 7.38 26 32 42 26 30 19 2 22 0 1 3.84 3.66 0.80 1.20 11.96 6.90 Percentage of Responses (%) 4 3 2 1 Mean S.D T-Test

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t-statistic computed at an alpha level of 5% and n 1 (51-1) degree of freedom. This is so because critical value of 1.99 from table is less than the computed values of 9.66 for S14. Table 6: Attitude on Residual Policy Research Statement 5 13. New capital investment requirements of the firm generally have little effect on modifying the pattern of dividend behaviour 14. Dividend distributions should be viewed as a residual after financing desired investments from available earnings. Source: Authors Computations DETERMINANTS OF DIVIDEND POLICY On the question that bothers on the determinants of dividend policy, respondents offered various factors, especially since the question is open ended. Despite varying responses, however, the most common factor sighted was industry effect. This is consistent with the findings of Graham, Harvey, and Michaely (2003) that dividend policies of competitor firms are a moderately important determinant of firms dividends. CONCLUSION This study examined dividend policies and practices among some Nigerian quoted firms. The study is in part a response to the dearth of empirical works on the subject matter in Nigeria in stark contrast to the developed countries of Europe, America and Asia. The results were consistent with most findings from previous empirical studies. The study concludes that investors prefer dividend payout to capital gains and that consequently, management of firms in Nigeria pay serious attention to shareholders preference for dividend. 24 50 16 7 3 3.88 1.02 9.66 5 25 35 29 6 3.02 1.02 3.64 Percentage of Responses (%) 4 3 2 1 Mean S.D T-Test

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Thus justifying the traditionalist or bird-in-the-hand theorist view of dividend relevance. Moreover, another major conclusion arrived at in this study is that dividend payment affects share price. Hence, Nigerian investors attitudes are synonymous with the findings of Litner (1956) and similar recent studies. Consequent upon the conclusion above, this study also concludes that investors prefer consistent and uninterrupted dividends payouts, and as long as dividend is paid, they are indifferent between the changes in dividend and actual dividend. Hence, this study reveals that management of Nigerian firms belief that a firm should have a target payout policy that is adjusted periodically. Finally, this study concludes that the dividend payout policy of a firm has significant signaling effect on its share price. Thus, Nigerian firms not only use dividend payout policy to signal their quality, but also to signal their future prospects.

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REFERENCES Aggarwal, R., (1980): Corporate Uses of Sophisticated Capital Budgeting Techniques: A strategic Perspective and a Critique of Survey Results, Interfaces 10 (2): April Arriff, M. and L. Johnson (1989) Dividend Policy in Singapore Proceedings of the Academy of International Business Meeting, Singapore Arsiraphongphisit, O., George, W. K., Skully, M.T., (2003): Financial Policies and Practices of Listed Firms in Thailand: Capital Structure, Capital Budgeting, Cost of Capital, and Dividends Financial Practice and Education. Spring/Summer. Baker, H. K., G. E. Farrelly, and R. B. Edelman (1985). A Survey of Management Views and Dividend Policy Financial Management (Autumn): 78-84 Baker, H. Kent and Smith, M. David (2003): Dividend Policy and Intra-industry Leaderfollower Behaviour, http://www.Google.com Baker, H. Kent and Gary E. Powell (2000) Determinants of Corporate Dividend Policy: A Survey of NYSE Firms, Financial Practice and Education Policy (1), 29-40 Baker, H. Kent, Gary E. Powell and E. Theodore Veit, (2002): Revisiting the Dividend Puzzle: Do All the Pieces Now Fit? Review of Financial Economics II (4), 241-261 Bebczuk, R. N. (2004): Explaining Dividend Policies in Argentina Department of Economics, Universidad Nacional de la Plata, www.depeco.econo.uncp.edu.at Bhojraj, S., and P. Sengupta (2004), Effect of Corporate Governance on Bond Ratings and Yields: The Role of Institutional Investor and Outside Directors Forthcoming, Journal of Business. Black, F. (1976), The Dividend Puzzle Journal of Portfolio Management, Vol. 2, 5-8.

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Brav, A., J. R. Graham, C. R. Harvey and R. Michaely (2003): Payout Policy in the 21st Century. Duke University Working Paper. Chirinko, R. S. and A. D. Philips, (1999), Dividend Policy at the Baby Bells: A Study of Septuplets: Emory University. Fama E. and Babiak, H. (1968): Dividend policy An Empirical Analysis, American Statistical Association Journal, December, Pp 1132-1161 Gordon, M. J. (1959): Dividends, Earnings and Stock Prices. Review of Economics and Statistics (Mau): 99-105 Hwang, L., Park K., and Park R. (2004) Do Firms with Good Corporate Governance Practice Pay More Dividends? Evidence from Korean Business Groups A Paper presented at the Korean Finance Association Annual Meeting. Karak, H. (1993): Dividend Profit and Dividend Decision, The Management Accountant, March, Pp 235-237 Kester, G. W., P. R. Chang, E. S. Echanis, Isa, M. M. Skully, M. T. Soedigno, S. and Tsui, K. (1998) Executive Views on Dividends and Capital Structure Policy in the AsiaPacific Region, in Emerging Capital Markets: Financial and Investment Issues, J. Jay Choi and John A. Doukas (eds), Quorom Books: 113-135 Litner (1956) Distribution of Incomes of Corporate Among Dividends, Retained Earnings and Taxes, American Economic Review Vol. 46, 97-113. Miller, M. and F. Modigliani (1961) Dividend Policy, Growth and The Valuation of Shares, Journal of Business, Vol. 34, 411-433.

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