Propensity to Pay Dividends: Evidence from US Banking Sector
- Jamal Al-Khasawneh
- Mohammad Shariff
- Khalid Al-Zubi
Using Fama and French’s (2001) methodology, this paper attempts to shed light on dividend policy and propensity to pay cash dividends implemented by U.S. commercial banks as a possible alternative choice for dividend-seeking investors. The results show that most banks pay dividends at increasing rates, more banks have started paying dividends, while a few have stopped paying dividends. The findings also indicate that the main explanatory variables in predicting cash dividends are: the total assets, return on equity, and equity to liability ratio.
- Michael ZhangEditorial Assistant