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Dividend Payout Ratio and Firm’s Profitability. Evidence from Pakistan

DOI: 10.4236/tel.2015.53051, PP. 441-445

Keywords: Dividend Payout, Earning Per Share, Return on Assets

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Abstract:

This paper investigates the relationship between dividend payout ratio and profitability of a firm. For this, two main sectors of Pakistan are selected, energy and textile. The study covers a time span of 1996-2008. Firm performance is measured by earning per share (EPS) and return on assets (ROA). The results of logarithmic regression show that no matter what industry is, there is a negative impact of dividend payout ratio on next year earnings of a firm.

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