Formulating a Dividend Policy for a Firm

Authors

  • Prakash Deo University of Houston-Downtown

DOI:

https://doi.org/10.33423/jabe.v25i2.6104

Keywords:

business, economics, dividend policy, return on equity, debt ratio, retained earnings, cost of equity, growth rate, stock price, dividend payout, cash payout

Abstract

This study seeks to identify key factors in formulating a dividend policy for a firm. We revisit the theory of stock valuation and identify and explore the impact of critical factors on a firm’s dividend policy. Next, we develop a framework and investigate financial data requirements to formulate such a policy and illustrate a methodology with an example of a case study for a firm which had never paid dividends but plans to change its policy. We recommend further research into issues in development and implementation of a firm’s stock repurchase plan in lieu of or to complement a dividend policy.

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Published

2023-06-05

How to Cite

Deo, P. (2023). Formulating a Dividend Policy for a Firm. Journal of Applied Business and Economics, 25(2). https://doi.org/10.33423/jabe.v25i2.6104

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Section

Articles