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Determinants of Dividend Payment of Non-Bank Financial Institutionsin Bangladesh

Corresponding Author : Chandon Kumar Pal (paulchandan54@yahoo.com)

Keywords : Dividend, NBFIs, Profitability, lagged retained earnings, lagged dividend

Abstract :

Dividend is the most debated issue in corporate finance. The study mainly focuses on dividend payment rate determinants of theNon- Bank Financial Institutions (NBFIs) of Bangladesh that are controlled by Bangladesh Bank and listed in Dhaka Stock Exchange (DSE). The sample is considered for those firms that publish their annual reports and also declared dividend to the shareholdersduring 2010-2017. The aim of this paper is to find out the key determinants of dividend payout ratio. For conducting the study eight independent variables are selected to find the impact on dividend payout ratio of the NBFIs. The findings of the study are that profitability, lagged dividend, and earnings per share are the key determinants of the dividend payout ratio. Profitability, lagged dividend, and earnings per share have positive influence on the dividend payment decision.Of the selected variables, onlyleverage of the firm has negative impact on the dividend payment decision.For reducing the agency conflict, the NBFIs have to declare dividends to the owners of the firm based on the profitability of the firm and dividend policy.

Published on December 31st, 2019 in Vol 30, No 2, Management & Business Administration