Dividend Policy and Asymmetric Information

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Dividend Policy and Asymmetric Information

By | November 2012
Page 1 of 17
International Journal of Economics and Finance

February, 2009

Asymmetric Information and Dividend Policy in Emerging Markets: Empirical Evidences from Iran Hashem Valipor Science and Research Branch Azad University, Tehran, Iran Tel: 98-917-308-6986 E-mail: h.Dvalipour@gmail.com

Vahab Rostami Science and Research Branch Azad University, Tehran, Iran Tel: 98-912-241-6433 E-mail: vahab.rostami@gmail.com

Mahdi Salehi, PhD (corresponding author) Accounting and Management Department Zanjan University, Zanjan, Iran Tel: 98-912-142-5323 Abstract Purpose-this study investigates the effect of asymmetric information on dividend policy in listed companies in Tehran Stock Exchange. Methodology-four main hypothesis have designed by theoretical framework, and tested on 111 listed companies in Tehran stock exchange during 2003 to 2007. The statistic analysis had done by malt- variable regression analysis. Findings-the study findings show that there is a meaningful and reverse relationship between asymmetric information and dividend policy. Some other findings show there is a meaningful relationship between dividend policy and return on stock but there is no meaningful relationship between dividend policy with firm size and book value to market value of equity ratio. Practical implementation-the finding of the study could be helpful for university students and users of financial information and other financial analysts in capital market. Keywords: Asymmetric information, Dividend policy, Capital market, Signalling theory 1. Introduction Corporate dividend policy has captured the interest of economists of this century and over the recent decades has been the subject of intensive theoretical modeling and empirical examination. Further, several factors may affect to corporate dividend policy, which one of the most important factor is asymmetric information. This paper study this issue that how asymmetric information can has effect on dividend policy by testing the...

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