The economical and behavioral determinants of cash dividends policy

Abstract

Cash dividend policy is affected by financial and behavioral factors. Available information in the financial markets reduces the uncertainty and leads to better decisions for the performance and organizational effectiveness. Companies face uncertainty with respect to the world-wide policy, growth, stability, technology and the changes in consumers‘ tastes. The determinants and factors that influence the decision to pay dividends include the stakeholders‘ perceptions on dividends announcements, the pattern of dividends payments, the opportunities of investments, the effects on share price, the effects of taxes, and the companies‘ size.