Dividend Payout Study of Companies in Bangladesh: A Preliminary Study

Abstract

Dividend announcement is considered as a signal to convey information to the market. Many researchers have found relevance of signalling power of dividends to market. Still there are arguments among researchers whether dividend announcements really convey any information or not. From the literature review it is found that dividend announcements are best in conveying information in the absence of perfect capital market, rational behaviour and taxes. Dividend initiations and omissions have significant impact on firms' earnings, shareholders’ wealth and give signal about the current and future management policy of a firm.