SIGNALING,
DIVIDENDS, AND CAPITAL FROM CROSS SECTOR COMPARISONS
By
ABSTRACT
This paper examines the dividend behavior of firms operating in construction, consumer product, and plantation. The major objective for this study is to find out whether debt ratio, business risk, growth rate of earnings, return on equity, and firm size will affect dividend yield from 2000 to 2003. To achieve this objective, the simple regression analysis and multiple regression analysis are conducted. The results of this research show that consumer product firms pay higher dividends than plantation firms. The dividend payments from construction firms are the lowest among the three sectors. In addition, regression results suggest that dividend payments of consumer product firms are explained by debt and firm size. However, dividend payments of construction firms seem to be affected by debt and profitability. In turn, plantation firms’ dividends are explained by return on equity and firm size. Therefore, the dividend payments of these sectors are different indicating different sensitivities to these variables.
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December 2003
Number 2