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Dividend Payout Ratio and Firm’s Profitability. Evidence from Pakistan
Lahore Business School, The University of Lahore, Lahore, Pakistan
Public Administration and Law School, Liaoning Technical University, Fuxin, China
Government Islamia College of Commerce, Lahore, Pakistan
Lahore Business School, The University of Lahore, Lahore, Pakistan
- 1 Lahore Business School, The University of Lahore, Lahore, Pakistan
- 2 Public Administration and Law School, Liaoning Technical University, Fuxin, China
- 3 Government Islamia College of Commerce, Lahore, Pakistan
- 4 Lahore Business School, The University of Lahore, Lahore, Pakistan
Theoretical Economics Letters·Volume 05 (2015)·Pages 441–445·Published 8 May 2015·DOI10.4236/tel.2015.53051
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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 time span 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 a negative impact of dividend payout ratio on next year earnings of a firm.
KeywordsDividend PayoutEarning Per ShareReturn on Assets
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