Identifing and Prioritizing Factors Influencing Idevidual Investors' Intention to Receive Cash Devidend

Subject Areas : Journal of Investment Knowledge

Abbas Kamarei ¹ , Meisam Safizadeh ² , Sadegh Sepandarand ³ , Hajar Hakimi ⁴

1 - Ph.D student in Business Administration, Faculty of Management and Accounting, Allameh Tabataba'i University, Tehran, Iran
2 - MSc. of Financial Management, Faculty of Management, University of Tehran, Tehran, Iran
3 - Ph.D. in Business Administration, Allameh Tabataba'i University, Tehran, Iran (Corresponding Author)
4 - Ph.D student in Business Administration, Faculty of Management, University of Tehran, Tehran, Iran

Received: 2017-04-21 Accepted : 2017-07-01 Published : 2017-10-23

Keywords: Cash Dividends, Earnings Per Share (EPS), Common Stock,

Abstract :

In the present study a batch of questionnaires was handed out to a group of stock market investors in Tehran addressing the question: “Why individual investors yearn for dividends?” The data was gathered later on and the results revealed that this inclination on getting the dividends is, to a certain extent that the cost of cashing dividends turns out to be a lot lower than that of selling shares. The results are, on one hand, strongly confirming and corroborating the “Signaling Model” of Bhattacharya (Imperfect information, dividend policy and the bird in the hand) and of Miller and Rock (Dividend policy, growth and the valuation of shares), and yet on the other hand, opposing the “Agency Theory” of Jensen. Furthermore, it is drawn from the results that the “Behavioral Finance Theory” of Shefrin and Statman for cash dividends is not confirmed. In conclusion, the findings of the study are indicative of the fact that individual investors have no tendency on spending a large part of their dividends.

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