| Summary: | 碩士 === 國立中央大學 === 財務金融研究所 === 97 === What kind of elements will affect dividend policies? Miller and Modigliani (1961) had considered that dividend is irrelevant with a company’s value in a perfect and efficient capital markets. On the other hand, signaling theory (also called “Information Content Effect”) think that the varied dividend policies is the effect of information content, which effects the stock price. Myers and Majluf (1984) issued “Residual Dividend Theory”. They found that if a company has more investment opportunities, they will pay less dividend or not to pay. In addition, Fama and French (2001) found the characteristics of company who paying dividends. They proved the profitability, investment opportunities and the size of company will affect dividend policies.
Our research follows Fama and French (2001), to detect the characteristics of paying companies, especially the effect of taxes cut in 2003, by using the database of COMPUSTAT (the version of North American). The sample period is from year 1991 to 2006. By using multiple regression and logistic regression analyze these characteristics, we found that:
(1) Companies with higher profitability have more probabilities to pay dividend.
(2) Companies with more investment opportunities have fewer probabilities to pay dividend.
(3) Larger companies have more probabilities to pay dividend
(4) The act of taxes cut in 2003 encouraged companies to pay dividends.
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