| Title : | Impact of liquidity and profitability on dividend payout policy of Nepalese commercial Banks | | Material Type: | printed text | | Authors: | Roshani Paudel, Author | | Publication Date: | 2017 | | Pagination: | 91P. | | Size: | GRP/Thesis | | Accompanying material: | 11/B | | Languages : | English | | Descriptors: | Dividend policy
| | Class number: | 332.1 | | Abstract: | The study of dividend policy has captured the attention of finance scholars since the middle of the last century. Dividend policy is a very crucial issue in the modern corporate business environment. Many studies have been carried out to examine the impact of liquidity and profitability on dividend payout policy. In regards to the impact of liquidity and profitability on dividend payout policy the results are not unanimous. Some of the scholars’ state that, dividend policy is irrelevant whereas other scholars’ argued that dividend is relevant. Dividend is a sum of money that is divided among the shareholders, such as the part of a company’s profit paid and part of the reserve of the company.
This study attempts to examine the impact of liquidity and profitability on dividend payout policy of Nepalese commercial banks. The study also identifies the practitioner’s preference towards dividend payment. The study is based on secondary data of 16 commercial banks with 144 observations for the period of 2007/08 to 2015/16. Data and information have been collected from Nepal Stock Exchange, Security Exchange Board of Nepal, Banking and Financial Statistics of NRB and annual reports of the selected commercial banks. The research design adopted in this study is descriptive and causal comparative research design as it deals with the impact of liquidity and profitability on dividend payout policy of Nepalese commercial banks.
The result shows that average dividend per share is highest for SCBL (Rs. 65.64) and lowest for NCC (Rs. 4.14). The average dividend yield is highest for NIBL (4.42 percent) and lowest for EBL (1.38 percent). The average liquidity is highest for NBBL (26.49 percent) and lowest for HBL (10.88 percent).NBBL has highest average profitability (5.13 percent) and MBL has lowest average profitability (0.79 percent). The average earning per share is highest for EBL (Rs. 87.29) and lowest for NCC (Rs. -7.41). EBL has highest average leverage (92.95 percent) and NMB has lowest average leverage (88.98 percent). NIBL has highest average firm size (Rs. 74.08 billion) and NCC has lowest average firm size (Rs. 19.88 billion). Average lagged dividend is highest for SCBL (Rs. 76.19) and lowest for NCC (Rs. 2.36).
The descriptive statistics for selected commercial bank shows that the average dividend per share is Rs. 22.56, average dividend yield is 2.74 percent, average liquidity is 17.18 percent, average profitability is 1.86 percent, average earning per share is Rs. 35.03, average leverage is 90.99 percent, average firm size is Rs.39.81 billion and average lagged dividend is Rs. 22.57.
The correlation matrix shows that liquidity is negatively correlated to dividend per share.It indicates that increase in liquidity leads to decrease in dividend per share. However, profitability and earning per share are positively related to dividend per share. It indicates that higher the profitability and earning per share,higher would be the dividend per share.Similarly, leverage has positive relationship with dividend per share. The result states that higher the leverage, higher would be the dividend per share.Likewise, firm size and lagged dividend has positive relationship with dividend per share. It reveals that larger the firm size and lagged dividend, higher would be the dividend per share.
The result also shows that liquidity is negatively correlated to dividend yield. It indicates that higher the liquidity, lower would be the dividend yield.However, profitability and earning per share are positively related to dividend yield.It indicates that higher the profitability and earning per share, higher would be the dividend yield. On the other hand, leverage is negatively related to dividend yield.The result states that higher the leverage, lower would be the dividend yield. However, firm size and lagged dividend has positive relationship with dividend yield.It reveals that larger the firm size and lagged dividend, higher would be the dividend yield.
The regression result shows that liquidity has negative impact on dividend per share. Moreover, profitability and earning per share has positive and significant impact on dividend per share. Similarly, leverage has positive impact on dividend per share. Additionally, firm size and lagged dividends has positive and significant impact on dividend per share.
The result also indicates that there is negative impact of liquidity on dividend yield. However, the result shows that profitability has positive impact on dividend yield. Likewise, earning per share has positive impact on dividend yield. On the other hand, leverage has negative impact on dividend yield. Additionally, firm size and lagged dividend has positive and significant impact on dividend yield.
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Impact of liquidity and profitability on dividend payout policy of Nepalese commercial Banks [printed text] / Roshani Paudel, Author . - 2017 . - 91P. ; GRP/Thesis + 11/B. Languages : English | Descriptors: | Dividend policy
| | Class number: | 332.1 | | Abstract: | The study of dividend policy has captured the attention of finance scholars since the middle of the last century. Dividend policy is a very crucial issue in the modern corporate business environment. Many studies have been carried out to examine the impact of liquidity and profitability on dividend payout policy. In regards to the impact of liquidity and profitability on dividend payout policy the results are not unanimous. Some of the scholars’ state that, dividend policy is irrelevant whereas other scholars’ argued that dividend is relevant. Dividend is a sum of money that is divided among the shareholders, such as the part of a company’s profit paid and part of the reserve of the company.
This study attempts to examine the impact of liquidity and profitability on dividend payout policy of Nepalese commercial banks. The study also identifies the practitioner’s preference towards dividend payment. The study is based on secondary data of 16 commercial banks with 144 observations for the period of 2007/08 to 2015/16. Data and information have been collected from Nepal Stock Exchange, Security Exchange Board of Nepal, Banking and Financial Statistics of NRB and annual reports of the selected commercial banks. The research design adopted in this study is descriptive and causal comparative research design as it deals with the impact of liquidity and profitability on dividend payout policy of Nepalese commercial banks.
The result shows that average dividend per share is highest for SCBL (Rs. 65.64) and lowest for NCC (Rs. 4.14). The average dividend yield is highest for NIBL (4.42 percent) and lowest for EBL (1.38 percent). The average liquidity is highest for NBBL (26.49 percent) and lowest for HBL (10.88 percent).NBBL has highest average profitability (5.13 percent) and MBL has lowest average profitability (0.79 percent). The average earning per share is highest for EBL (Rs. 87.29) and lowest for NCC (Rs. -7.41). EBL has highest average leverage (92.95 percent) and NMB has lowest average leverage (88.98 percent). NIBL has highest average firm size (Rs. 74.08 billion) and NCC has lowest average firm size (Rs. 19.88 billion). Average lagged dividend is highest for SCBL (Rs. 76.19) and lowest for NCC (Rs. 2.36).
The descriptive statistics for selected commercial bank shows that the average dividend per share is Rs. 22.56, average dividend yield is 2.74 percent, average liquidity is 17.18 percent, average profitability is 1.86 percent, average earning per share is Rs. 35.03, average leverage is 90.99 percent, average firm size is Rs.39.81 billion and average lagged dividend is Rs. 22.57.
The correlation matrix shows that liquidity is negatively correlated to dividend per share.It indicates that increase in liquidity leads to decrease in dividend per share. However, profitability and earning per share are positively related to dividend per share. It indicates that higher the profitability and earning per share,higher would be the dividend per share.Similarly, leverage has positive relationship with dividend per share. The result states that higher the leverage, higher would be the dividend per share.Likewise, firm size and lagged dividend has positive relationship with dividend per share. It reveals that larger the firm size and lagged dividend, higher would be the dividend per share.
The result also shows that liquidity is negatively correlated to dividend yield. It indicates that higher the liquidity, lower would be the dividend yield.However, profitability and earning per share are positively related to dividend yield.It indicates that higher the profitability and earning per share, higher would be the dividend yield. On the other hand, leverage is negatively related to dividend yield.The result states that higher the leverage, lower would be the dividend yield. However, firm size and lagged dividend has positive relationship with dividend yield.It reveals that larger the firm size and lagged dividend, higher would be the dividend yield.
The regression result shows that liquidity has negative impact on dividend per share. Moreover, profitability and earning per share has positive and significant impact on dividend per share. Similarly, leverage has positive impact on dividend per share. Additionally, firm size and lagged dividends has positive and significant impact on dividend per share.
The result also indicates that there is negative impact of liquidity on dividend yield. However, the result shows that profitability has positive impact on dividend yield. Likewise, earning per share has positive impact on dividend yield. On the other hand, leverage has negative impact on dividend yield. Additionally, firm size and lagged dividend has positive and significant impact on dividend yield.
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