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

DOI: 10.4236/tel.2015.53051   PDF   HTML   XML   4,809 Downloads   6,671 Views   Citations


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.

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Hasan, M. , Ahmad, M. , Rafiq, M. and Rehman, R. (2015) Dividend Payout Ratio and Firm’s Profitability. Evidence from Pakistan. Theoretical Economics Letters, 5, 441-445. doi: 10.4236/tel.2015.53051.

Conflicts of Interest

The authors declare no conflicts of interest.


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