Dividend Payout Ratio and Firm's Profitability. Evidence from Pakistan

Mudassar Hasan, Muhammad Ishfaq Ahmad, Muhammad Yasir Rafiq, Ramiz Ur Rehman
2015 Theoretical Economics Letters  
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.
doi:10.4236/tel.2015.53051 fatcat:wfwlosz7ijhmbdbiin4gal5lke