| Title : | Factors affecting dividend payout in Nepalese commercial banks | | Material Type: | printed text | | Authors: | Shilpa Shrestha, Author | | Publication Date: | 2016 | | Pagination: | 89p. | | Size: | GRP/Thesis | | Accompanying material: | 7/B | | Languages : | English | | Descriptors: | Dividends
| | Class number: | 332.632 | | Abstract: | Dividend is the return from investment in equity shares. It is the profit made by the firm
which is distributed to the shareholders. Firms view dividend policy very important
because it determines what funds flow to investors and what funds are retained by the
firm for reinvestment. Shareholders always look at the capability of the companies to
initiate a dividend. The decisions of the firm regarding how much earnings could be
paid out as dividend and how much could be retained is the concern of dividend policy
decision (Alzomaia & Al-Khadhiri, 2013). DeAngelo and DeAngelo (2006) revealed
that optimal payout policy is driven by the need to distribute the firm’s free cash flow.
The study stated that, firms optimally alter dividends through time in response to
evolution of their investment opportunity set. The principle factor that contributes to
deviations from the optimal payout ratio is due changes in the company’s profit, and if
the profit increases the dividend payout should increase in same proportions (Meyers
& Bacon, 2004).
The major purpose of this study is to analyze the determinants of dividend payout in
Nepalese commercial banks. Other specific objectives of the study are: (a) to examine
the structure and pattern of return on assets, net worth, dividend yield, retain earning,
earning per share, debt-equity ratio and size. (b) to find out the relationship between
return on assets and dividend payout. (c) to determine the impact of net worth and
retained earnings on dividend payout. (d) to examine effect of debt-equity ratio and
dividend yield on dividend payout.
The study is based on descriptive and causal comparative research design. The
descriptive reserch design has been adopted to undertake fact-finding operation
searching for adequate information about the impact of return on assets, retained
earnings, debt-equity ratio, dividend yield and other variables on the dividend payout
of Nepalese commercial banks. Moreover, the study also emphasizes on cause and
effect relationship between dividend payout and its determinants in Nepalse context.
The study is based on the secondary data which are gathered from 19 commercial banks
in Nepal with 152 total number of observation for the period 2006/07- 2013/14. The
main sources of data are official website of concern commercial banks, annual reports
of commercial banks, Supervision Reports published by NRB and annual reports of
respective commercial banks.
VIII
The result shows that the average dividend per share is highest for SCBL and lowest
for JBL. The average market price per share is highest for SCBL and lowest for JBL.
The average return on assets is highest for NABIL and lowest for JBL. The study
reveals that return on assets, retained earnings, debt-equity ratio has positive
relationship with divdend per share. Similarly, dividend yield, earning per share, size
and net worth also has a positive relationhip with dividend per share. It indicates that
return on assets, retained earnings and other variables have positive significance on
dividend per share. The regression results shows that beta coefficients are positive for
return on assets, retained earnings, debt-equity ratio, dividend yield, earning per share,
size and net worth with dividend payout ratio. However, the beta coefficients are
significant for return on assets, retained earnigns an dividend yield. Similarly, the study
found that return on assets, retained earnings, debt-equity ratio, earning per share, size
and net worth has positive relationship with market price per share whereas, dividend
yield has negative relationship with market price per share.
The major conclusion of the study is that return on assets, retained earning and dividend
yield plays a significant role in determining the dividend payout of Nepalese
commercial banks. |
Factors affecting dividend payout in Nepalese commercial banks [printed text] / Shilpa Shrestha, Author . - 2016 . - 89p. ; GRP/Thesis + 7/B. Languages : English | Descriptors: | Dividends
| | Class number: | 332.632 | | Abstract: | Dividend is the return from investment in equity shares. It is the profit made by the firm
which is distributed to the shareholders. Firms view dividend policy very important
because it determines what funds flow to investors and what funds are retained by the
firm for reinvestment. Shareholders always look at the capability of the companies to
initiate a dividend. The decisions of the firm regarding how much earnings could be
paid out as dividend and how much could be retained is the concern of dividend policy
decision (Alzomaia & Al-Khadhiri, 2013). DeAngelo and DeAngelo (2006) revealed
that optimal payout policy is driven by the need to distribute the firm’s free cash flow.
The study stated that, firms optimally alter dividends through time in response to
evolution of their investment opportunity set. The principle factor that contributes to
deviations from the optimal payout ratio is due changes in the company’s profit, and if
the profit increases the dividend payout should increase in same proportions (Meyers
& Bacon, 2004).
The major purpose of this study is to analyze the determinants of dividend payout in
Nepalese commercial banks. Other specific objectives of the study are: (a) to examine
the structure and pattern of return on assets, net worth, dividend yield, retain earning,
earning per share, debt-equity ratio and size. (b) to find out the relationship between
return on assets and dividend payout. (c) to determine the impact of net worth and
retained earnings on dividend payout. (d) to examine effect of debt-equity ratio and
dividend yield on dividend payout.
The study is based on descriptive and causal comparative research design. The
descriptive reserch design has been adopted to undertake fact-finding operation
searching for adequate information about the impact of return on assets, retained
earnings, debt-equity ratio, dividend yield and other variables on the dividend payout
of Nepalese commercial banks. Moreover, the study also emphasizes on cause and
effect relationship between dividend payout and its determinants in Nepalse context.
The study is based on the secondary data which are gathered from 19 commercial banks
in Nepal with 152 total number of observation for the period 2006/07- 2013/14. The
main sources of data are official website of concern commercial banks, annual reports
of commercial banks, Supervision Reports published by NRB and annual reports of
respective commercial banks.
VIII
The result shows that the average dividend per share is highest for SCBL and lowest
for JBL. The average market price per share is highest for SCBL and lowest for JBL.
The average return on assets is highest for NABIL and lowest for JBL. The study
reveals that return on assets, retained earnings, debt-equity ratio has positive
relationship with divdend per share. Similarly, dividend yield, earning per share, size
and net worth also has a positive relationhip with dividend per share. It indicates that
return on assets, retained earnings and other variables have positive significance on
dividend per share. The regression results shows that beta coefficients are positive for
return on assets, retained earnings, debt-equity ratio, dividend yield, earning per share,
size and net worth with dividend payout ratio. However, the beta coefficients are
significant for return on assets, retained earnigns an dividend yield. Similarly, the study
found that return on assets, retained earnings, debt-equity ratio, earning per share, size
and net worth has positive relationship with market price per share whereas, dividend
yield has negative relationship with market price per share.
The major conclusion of the study is that return on assets, retained earning and dividend
yield plays a significant role in determining the dividend payout of Nepalese
commercial banks. |
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