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Corporate Dividend Policy:
The Views of British Financial Managers


  • Alpa Dhanani

    Corresponding authorSearch for more papers by this author
    • The author is from the Cardiff Business School. She would like to acknowledge the financial support from Cardiff University and the Cardiff Business School for this project. She would also like to thank the anonymous referee of this paper; Mr. R. Roberts; Professors R. Groves, M. Jones, H. Mellet and M. Peel; Drs. M. Clatworthy and P. Wells; and participants at the BAA annual conference (2002); for their valuable comments on earlier drafts of this paper.

†Alpa Dhanani, Cardiff Business School, Colum Drive, Cardiff CF10 3EU, UK.


Abstract:  Using a survey approach, this paper examines the importance and relevance of the various theories of dividend policy for UK companies. Further, it evaluates the extent to which corporate characteristics such as size and industry influence managerial responses to the survey. In general, the results support dividend hypotheses relating to signalling and ownership structure, in preference to those about capital structure and investment decisions and agency issues. At a more detailed level, the cross sectional analysis reveals important differences between managers’ responses, based on company size, industry sector, growth opportunities, ownership structure and information asymmetry.