Managers’ Perception towards Dividends and Dividend Policy—Evidence from Bangladesh

Abstract

Dividend policy has been one of the most important research topics in modern corporate finance. From the practitioners’ viewpoint, dividend policy of a firm has implications for investors, managers, lenders and other stakeholders. The current study aims to examine critically the managers’ perception towards dividends and Dividend Policy of companies listed on Dhaka Stock Exchange (DSE) of Bangladesh. The study employed a practical survey on the perception of managers’ of twenty four companies to test the behavior of Bangladeshi listed firms towards dividend payout policy. Investigation of different dividend theories reveals that the bird-in-hand theory and the relevant value theory receive the highest support among the surveyed managers. It is also evident from the analysis that external factors related to the current financial market crises together with the state of the capital market and restrictions imposed by debt providers are all important factors in formulating dividend policy. The current study extends limited previous research based on questionnaire and survey related dividend policy. It thus provides new evidence from an emerging and fast growing economy like Bangladesh.