Trends of Dividend Payment Practices of Listed Corporate Firms in the Dhaka Stock Exchange

Abstract

Objective: This paper examines the dividend payment practices of corporate firms in Bangladesh over the period 2000-2014 and attempts to explain the observed behavior by analyzing the trends and growth of dividend and to find the relationship between the trends and growth of the prices of the shares.
Methodology: This study uses Simple Growth Rate (SGR), Compound Growth Rate (CGR) and Trend Growth Rate (TGR) for measuring the growth of dividend and the price of the shares in the Dhaka Stock Exchange (DSE). To find the TGR we used time series data and to find the relationship between price and dividend by regression we used panel data. Our sample contains 92 listed non-financial companies from different sectors. In this study, we have observed the trend of price movement, industry-wise both for cash dividend paying and bonus dividend paying companies.
Findings: Results show that the companies which are paying cash dividend are able to maximize their share values to a greater extent than the companies which are paying bonus dividends.