DIVIDEND POLICY AND ITS RELATIONSHIP TO INVESTMENT AND FINANCING POLICIES: EMPIRICAL EVIDENCE |
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| Authors: | Graham H Partington |
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| Institution: | The author is Senior Lecturer in Accounting and Financial Management at Macquarie University, Sydney, Australia. Helpful comments from Ian Young, Carrick Martin, Dick Tress, Rob Chenhall and Peter Brownell are gratefully acknowledged. Thanks also to the University of Bath, where this paper was written, for the facilities provided while the author was on sabbatical at the University's School of Management. |
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| Abstract: | In this paper it is argued that dividend policy is not determined as a residual, but rather that firms adopt independent dividend and investment policies. Empirical evidence, based on a questionnaire survey, supports this view. Independent dividend and investment policies are possible because debt finance is usually raised in sufficient quantities to accommodate the financial demands created by dividend and investment decisions. |
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