Target Payout Ratios and Dividend Policy: British Evidence

This paper features a study of the dividend policies of the larger listed British companies. It focusses on the sample companies' usage of target payout ratios. A company with a target payout is defined as one which has a policy of attempting to pay out a fixed proportion of available earnings...

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Bibliographic Details
Published in:Managerial finance 1992-01, Vol.18 (1), p.9-21
Main Author: Allen, D.E
Format: Article
Language:English
Subjects:
Dividends
Earnings
Policy making
Ratios
Statistical analysis
Studies
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Summary:This paper features a study of the dividend policies of the larger listed British companies. It focusses on the sample companies' usage of target payout ratios. A company with a target payout is defined as one which has a policy of attempting to pay out a fixed proportion of available earnings as dividends. In particular, it examines the extent of the usage of explicit target payouts, the range of target payouts adopted and the frequency of changes in such targets. It also examines the factors which are perceived to have an influence on the company's choice of these targets. Finally, it extends and parallels previous work by Partington (1984) on the use of target payouts by Australian companies.
ISSN:0307-4358
0307-4388
1758-7743
DOI:10.1108/eb018440