Dividend Payout Ratio and Firm’s Profitability: Evidence from Pakistan

Mudassar Hasan; Muhammad Ishfaq Ahmad; Muhammad Yasir Rafiq; Ramiz ur Rehman

doi:10.4236/tel.2015.53051

Dividend Payout Ratio and Firm’s Profitability: Evidence from Pakistan

Mudassar Hasan, Muhammad Ishfaq Ahmad, Muhammad Yasir Rafiq, Ramiz ur Rehman

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Abstract

This paper investigates the relationship between dividend payout ratio and profitability of a firm.For this, two main sectors of Pakistan are selected, energy and textile. The study covers a timespan of 1996-2008. Firm performance is measured by earning per share (EPS) and return on assets (ROA). The results of logarithmic regression show that no matter what industry is, there is anegative impact of dividend payout ratio on next year earnings of a firm.

Original language	English
Pages (from-to)	441-445
Number of pages	5
Journal	Theoretical Economics Letters
Volume	5
Issue number	3
DOIs	https://doi.org/10.4236/tel.2015.53051
Publication status	Published - 29 Jun 2015
Externally published	Yes

Keywords

dividend payout
earning per share
return on assets

Access to Document

10.4236/tel.2015.53051Licence: CC BY

TEL_2015062916193325Final published version, 262 KBLicence: CC BY

Cite this

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title = "Dividend Payout Ratio and Firm{\textquoteright}s Profitability: Evidence from Pakistan",

abstract = "This paper investigates the relationship between dividend payout ratio and profitability of a firm.For this, two main sectors of Pakistan are selected, energy and textile. The study covers a timespan of 1996-2008. Firm performance is measured by earning per share (EPS) and return on assets (ROA). The results of logarithmic regression show that no matter what industry is, there is anegative impact of dividend payout ratio on next year earnings of a firm.",

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AB - This paper investigates the relationship between dividend payout ratio and profitability of a firm.For this, two main sectors of Pakistan are selected, energy and textile. The study covers a timespan of 1996-2008. Firm performance is measured by earning per share (EPS) and return on assets (ROA). The results of logarithmic regression show that no matter what industry is, there is anegative impact of dividend payout ratio on next year earnings of a firm.

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