Why Do Managers Prefer to Pay Dividend in Cash? Essay -- Business, Sto

The muse makes use of the financial data on Pakistani listed firms for 2001-2008 to look at the objective behind distribution of cash dividends. found on the analysis it is found that poorly performing firms listed on Karachi conduct Market (KSE) having larger portion of non-tradable sh ares redress cash dividends. Because the holders of non-tradable shares (directors and block-holders) do non/can non realize capital gains from positive change in the price of their holdings. The study finds that cash dividend distribution demeanor of the poorly-performing firms is subjected to what the directors and block-holders prefer. The result advocates the findings of Faccio, Lang and Young (2006), Chen, Fung and Leung (2007) regarding cash channeling hypothesis. signalise words non-tradable shares cash dividends cash channeling hypothesis1. IntroductionDividend policy for a firm means whether to pay or not pay whether to pay in cash, in stocks or both in cash and stocks and how a great deal to pay. Why do firms distribute cash dividends when they distinguish a tumble in their earnings? Why not stock repurchases? Why not stock dividend? To look at this research issue, the research will esteem the cash dividend distribution behavior of firms in light of different possession structures having trading restrictions. KSE is a developing market of the region with not a sound regulatory framework. There is a shortage of managerial endowment fund in the firms listed on the market. So it is reasonable to say that as equal to firms listed on the developed markets of United States and Europe, the firms listed on KSE do not observe good corporate governance practices generally. Louis Cheng, Fung Leung (2004). Moreover, to protect shareholder... ...ent variables i.e., Director Ownership, Financial institutions monomania, Block-holders ownership to examine the relation with the dependent variable which is Cash-Dividend-to-assets. But there are some other variables that al so affect the cash dividend distribution behavior of a firm. To construe for that effect the study include those variables in the model. The control variables are Debt-to-Assets, Free Cash scat per Share, Free Cash Flow to Assets, Earning per Share, Size of the firm and Return on Assets.4. Results and Discussion4.1 Descriptive Statistics hold over 4.1 provides summary statistics of Cash Dividend to Assets, Director Ownership, Financial institutions ownership, Block-holders ownership, Free Cash shine to Assets, Earnings per Share Debt-to-Assets ratio, Return on Assets and firm size (LnAssets) of the sampled firms for the design 2001 to 2008.