DIVIDEND PERFORMANCE OF BANGLADESHI COMPANIES: A STUDY ON DHAKA STOCK EXCHANGE

Md. Mohiuddin, Institute of Business Administration (IBA), University of Dhaka, Bangladesh
Tarique Mahmud Pasha, Institute of Business Administration (IBA), University of Dhaka, Bangladesh

Published in

JOURNAL OF INTERNATIONAL FINANCE STUDIES
Volume 18, Issue 2, p17-26, October 2018

ABSTRACT

Dividend policy indicates the set of guidelines a company uses to decide how much of its earnings it will pay out to shareholders. Dividend policy is a crucial financing decision for any type of organization. However, it is evidenced that performance of dividend policy varies across industries in Bangladesh. The objective of this study is to investigate if significant difference exists in the dividend performance among Bank & NBFI, Manufacturing and Service sector listed on Dhaka Stock Exchange. Top 100 companies of Dhaka Stock Exchange were chosen as a proxy to conduct this research. To assess dividend performance, dividend payout ratio and dividend yield of five years 2013-2017 of the selected companies were used and analyzed. Descriptive analysis was used to summarize the results. Hypothesis testing results show significant difference among the sectors in terms of dividend payout ratio and dividend yield does not always exist. The findings indicate that service sector outperforms other sectors in terms of both divided yield and payout. Further study can explore the possible reasons of such difference.

Keywords

Bank & NBFI sector, Dhaka Stock Exchange, Developing Economy, Dividend Payout Ratio, Dividend Yield, Manufacturing Sector, Service Sector


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