Volume : VII, Issue : IX, September - 2017

STYLIZED FACTS OF DIVIDEND POLICY IN DEVELOPING STOCK EXCHANGE: CASE STUDY OF BRVM

Aboudou Ouattara

Abstract :

 This study is introduced to identify the stylized facts of dividend policy of companies listed at West African Regional Stock Exchange (BRVM).

To attain this goal, data on financial statements and dividends paid during the period 2011–2016 were mobilized. They have been analyzed by descriptive statistics and econometric methods.

It emerges from the analysis that the dividend payment is very frequent among companies listed at BRVM. On average, 71 % of listed companies choose the option of paying a dividend of 5.87€ in average for each share issued. A dividend per share of companies listed at BRVM is increasing since 2011. This dividend is growing about 5 % per year. However, it is not sufficient to compensate shareholders regarding the price paid by stockholder. Their yield is between 6.22 % and 7 %.

The decision to pay a dividend is determined by the amount and the annual variation of the net profit, the amount of the dividend paid in the previous period. The decision is very resilient confirming  ADDIN ZOTERO_ITEM CSL_CITATION {"citationID":"2bnpvsn8a8","properties":{"formattedCitation":"(Lintner, 1956)","plainCitation":"(Lintner, 1956)"},"citationItems":[{"id":2090,"uris":["http://zotero.org/users/local/gg8VPG8v/items/IVP4RMQW"],"uri":["http://zotero.org/users/local/gg8VPG8v/items/IVP4RMQW"],"itemData":{"id":2090,"type":"article–journal","title":"Distribution of Incomes of Corporations Among Dividends, Retained Earnings, and Taxes","container–title":"The American Economic Review","page":"97–113","volume":"46","issue":"2","source":"JSTOR","ISSN":"0002–8282","journalAbeviation":"The American Economic Review","author":[{"family":"Lintner","given":"John"}],"issued":{"date–parts":[["1956"]]}}}],"schema":"https://github.com/citation–style–language/schema/raw/master/csl–citation.json"} Lintner (1956)’s dividend theory. The analysis of dividend policy’s characteristics highlights a remarkable difference between financial institutions and industrial or commercial companies.

These results answer the readability of dividend policy in developing stock exchange like BRVM. They question the validity of the models build in developed stock exchange in the context of developing economies like WAEMU.

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Article: Download PDF   DOI : 10.36106/ijar  

Cite This Article:

Aboudou OUATTARA, STYLIZED FACTS OF DIVIDEND POLICY IN DEVELOPING STOCK EXCHANGE: CASE STUDY OF BRVM, INDIAN JOURNAL OF APPLIED RESEARCH : Volume-7 | Issue-9 | September-2017

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