Dividend policy, share price and return: a study on the Johannesburg Stock Exchange

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dc.contributor.advisorKnight, Rory Fen_ZA
dc.contributor.authorSealy, N Ren_ZA
dc.date.accessioned2016-03-09T09:06:13Z
dc.date.available2016-03-09T09:06:13Z
dc.date.issued1985en_ZA
dc.description.abstractThis thesis consists of an empirical investigation into the effects of firms' dividend policies on the prices of and returns realised on their ordinary shares listed on the Johannesburg Stock Exchange. A review of published theories as to whether the dividend policy of a firm ought to affect its value revealed that, under conditions approximating perfect capital markets, no dividend influence should be expected. Because of the wide range of market imperfections and their non uniform effect in the preferences they create amongst shareholders no consensus as to their aggregate influence on security returns exists. The writer's review of studies conducted by other researchers on overseas markets indicated no dividend effect. The main empirical investigation conducted by the writer into the effects of dividend policy on the value of a firm made use of cross sectional regression techniques and an expanded ex post form of the capital asset pricing model. The results of this test indicated a negative dividend preference by investors which is more likely to have resulted from the heavier taxation of dividends than capital gains, than from a dividend aversion in a perfect capital markets situation. The implication of these findings is that investors experiencing heavier taxation on dividend income than on capital gains may generally ignore the dividend policies of prospective investees, while all other investors stand to gain by biasing their investment selection toward high pay-out shares. In favouring certain pay-out ratios adequate regard must, however, be given to maintaining an adequately diversified portfolio. The test results further imply that firms may increase their value by reducing the dividend pay-out and accordingly, with capital requirements met from internal sources, reducing the amount of new capital raised through equity issues.en_ZA
dc.identifier.apacitationSealy, N. R. (1985). <i>Dividend policy, share price and return: a study on the Johannesburg Stock Exchange</i>. (Thesis). University of Cape Town ,Faculty of Commerce ,College of Accounting. Retrieved from http://hdl.handle.net/11427/17601en_ZA
dc.identifier.chicagocitationSealy, N R. <i>"Dividend policy, share price and return: a study on the Johannesburg Stock Exchange."</i> Thesis., University of Cape Town ,Faculty of Commerce ,College of Accounting, 1985. http://hdl.handle.net/11427/17601en_ZA
dc.identifier.citationSealy, N. 1985. Dividend policy, share price and return: a study on the Johannesburg Stock Exchange. University of Cape Town.en_ZA
dc.identifier.ris TY - Thesis / Dissertation AU - Sealy, N R AB - This thesis consists of an empirical investigation into the effects of firms' dividend policies on the prices of and returns realised on their ordinary shares listed on the Johannesburg Stock Exchange. A review of published theories as to whether the dividend policy of a firm ought to affect its value revealed that, under conditions approximating perfect capital markets, no dividend influence should be expected. Because of the wide range of market imperfections and their non uniform effect in the preferences they create amongst shareholders no consensus as to their aggregate influence on security returns exists. The writer's review of studies conducted by other researchers on overseas markets indicated no dividend effect. The main empirical investigation conducted by the writer into the effects of dividend policy on the value of a firm made use of cross sectional regression techniques and an expanded ex post form of the capital asset pricing model. The results of this test indicated a negative dividend preference by investors which is more likely to have resulted from the heavier taxation of dividends than capital gains, than from a dividend aversion in a perfect capital markets situation. The implication of these findings is that investors experiencing heavier taxation on dividend income than on capital gains may generally ignore the dividend policies of prospective investees, while all other investors stand to gain by biasing their investment selection toward high pay-out shares. In favouring certain pay-out ratios adequate regard must, however, be given to maintaining an adequately diversified portfolio. The test results further imply that firms may increase their value by reducing the dividend pay-out and accordingly, with capital requirements met from internal sources, reducing the amount of new capital raised through equity issues. DA - 1985 DB - OpenUCT DP - University of Cape Town LK - https://open.uct.ac.za PB - University of Cape Town PY - 1985 T1 - Dividend policy, share price and return: a study on the Johannesburg Stock Exchange TI - Dividend policy, share price and return: a study on the Johannesburg Stock Exchange UR - http://hdl.handle.net/11427/17601 ER - en_ZA
dc.identifier.urihttp://hdl.handle.net/11427/17601
dc.identifier.vancouvercitationSealy NR. Dividend policy, share price and return: a study on the Johannesburg Stock Exchange. [Thesis]. University of Cape Town ,Faculty of Commerce ,College of Accounting, 1985 [cited yyyy month dd]. Available from: http://hdl.handle.net/11427/17601en_ZA
dc.language.isoengen_ZA
dc.publisher.departmentCollege of Accountingen_ZA
dc.publisher.facultyFaculty of Commerceen_ZA
dc.publisher.institutionUniversity of Cape Town
dc.subject.otherAccountingen_ZA
dc.titleDividend policy, share price and return: a study on the Johannesburg Stock Exchangeen_ZA
dc.typeMaster Thesis
dc.type.qualificationlevelMasters
dc.type.qualificationnameMComen_ZA
uct.type.filetypeText
uct.type.filetypeImage
uct.type.publicationResearchen_ZA
uct.type.resourceThesisen_ZA
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