Thesis (MBA)--Stellenbosch University, 2001. / The objective of this mini study project is to record dividends of de-listed companies from copies of Annual Reports. It forms part of a larger research project at the Graduate School of Business of the University of Stellenbosch that aims at setting up a database containing published financial information on dividends for listed and de-listed companies. Dividends are a valuable source of information content. Recording, and thereafter employing an analysis of basic descriptive statistics on dividends, is one way to decipher such information. Calculating the average and median of dividends declared by companies sheds an insight to the nature of dividend payout. The purpose of the mini study project is to capture the interim, special, and final dividends per share. The method employed is to calculate dividend values and to compare them against those published. Total Rand values of dividends are calculated by multiplying the number of shares issued, by the dividends declared in cents, per share as noted on the directors' report, and notes to the income statement. This is achieved by means of an Excel spreadsheet model.

Thesis (PhD)--Stellenbosch University, 2015. / ENGLISH ABSTRACT: Share repurchases were allowed in South Africa as from 1 July 1999. The concept of repurchasing shares is therefore relatively new in this country, compared to many other countries (e.g. the United States of America and the United Kingdom), where it is an established practice. Considerable research in the field already exists, providing empirical evidence on the extent of share repurchase activities and current theoretical thinking on the motivations for share repurchases and the determinants affecting the choice of payout methods. In South Africa there are indications, as this study demonstrates, that research on payout methods and payout reform has become a matter of urgency. Share repurchase activity by JSE-listed companies is not comprehensively recorded by South African financial data sources. Prior research on South African share repurchases is limited, mainly owing to the fact that a comprehensive share repurchase database is not available. This study sets out to document the extent of share repurchases by companies in selected JSE-listed sectors (for reporting periods including 1 July 1999 to the 2009 year-ends of the companies) and to test whether empirical evidence and current theoretical thinking also applied in South Africa. The results of these tests were used to develop a model to ascertain what the significant determinants were when a JSE-listed company had to decide between repurchasing shares and paying special dividends. This study found that the South African regulatory environment pertaining to share repurchases differed from the regulatory environments of other countries. The main differences related to the share repurchase announcement structure (namely the JSE Listings Requirements that open market share repurchases need to be announced via SENS only once a 3% limit has been reached) and that subsidiaries are allowed to repurchase shares in the holding company (and have a tax benefit when compared to share repurchases made by the holding company itself). These differences affected the results of this study. On compiling a database on share repurchases by companies in selected JSE-listed sectors, it was found that the share repurchase announcements (made via SENS) could not be used as the main source to compile comprehensive share repurchase data (mainly owing to the 3% rule on open market share repurchases). Annual report disclosures were therefore scrutinised to obtain share repurchase data for this study. These disclosures were found to be applied inconsistently by companies (mainly because subsidiaries were allowed to repurchase shares in the holding company; International Financial Reporting Standards and the JSE Listings Requirements did not adequately cater for the differing South African regulatory environment in their disclosure stipulations; and compliance to the disclosure requirements were not adequately monitored). Consequently, an extensive process of verification was applied in order to compile a comprehensive and reliable share repurchase database for this study. When testing whether empirical evidence and current theoretical thinking on share repurchases also applied in South Africa, it was found that the unique South African regulatory environment led to certain aspects of the South African share repurchase experience not mirroring the global precedent. The main differences between the South African and global share repurchase evidence which emerged from the present study are that the open market share repurchase type is not the outright favoured repurchase type (as is the case globally); that subsidiaries repurchasing shares in the holding company are the favoured South African share repurchasing entity (as opposed to subsidiaries not being allowed to repurchase shares in most other countries); and that share repurchases announced via SENS do not represent comprehensive share repurchase data (as opposed to global security exchanges requiring share repurchase announcements on a regular and accurate actual-time basis). When testing the current theoretical thinking on the information-signalling motivation for share repurchases, it was found that the motivation for South African open market and pro rata share repurchases mirrored the current theoretical thinking. Open market share repurchases were found to be motivated by the information-signalling hypothesis, while the short-term abnormal returns of pro rata offers were offset by the negative abnormal returns over the long term. A share repurchase type unique to the South African share repurchase environment (namely the repurchase of treasury shares by the holding company) was found not to be motivated by the information-signalling hypothesis. This study also found that companies repurchasing shares were generally classified as value companies (which tend to be undervalued) prior to the repurchase transaction which mirrored the current theoretical thinking. In developing a model of choice to determine what the main determinants were when a company had to decide between open market share repurchases and special dividends, this study found that some of the South African determinants mirrored the current theoretical thinking, but also identified determinants which were not identified as significant determinants in global research. This study found that ownership structure, size of the distribution and level of company undervaluation were the significant factors which affected a company’s choice of payout method. It was found that smaller companies, with fewer shareholders and more public investors favoured open market share repurchases over special dividends. Open market share repurchases were found to be selected for smaller distributions when compared to special dividends. Companies paying special dividends were found to exhibit lower degrees of undervaluation when compared to companies which repurchased shares in the open market. This study found that share repurchases became a popular means of distributing excess cash as from 2005. A total amount of about R384 billion was spent on share repurchases during the reporting periods including 1 July 1999 to the 2009 year-ends of the companies included in the population of this study. Share repurchases did not exceed dividend payments over the target period and represented about 36 per cent of total payouts. In 2009, the final year of the study, share repurchases represented about 44 per cent of total payouts. The results of this study showed that investors would benefit over the long term when investing in companies which repurchased shares in the open market. It was also found that there were certain characteristics which were evident in companies when choosing open market share repurchases rather than special dividend payments. This study concluded that the South African regulatory environment possesses many characteristics of a developing economy’s financial systems. Suggestions are given on how to improve and better align the South African repurchasing environment to those of developed economies.

Thesis (MComm)--Stellenbosch University, 2013. / ENGLISH ABSTRACT: This study sets out to evaluate the possible influence of increasing and declining markets on the returns of dividend-investing strategies. This study’s objective, therefore, was to evaluate the possible influence dividend pay-out policy has on share return. Secondary objectives serve to investigate how the size of cash dividend payments, measured in dividend yield (DY), influence share value, especially during bull and bear markets respectively. In order to address the stated objectives of this study and prevent possible survivorship bias, the sample included listed and delisted shares for the period 1995 to 2010. Initially, all firms that were listed on the Johannesburg Stock Exchange (JSE) during the period under review were considered, both that were listed at the end as well as firms that delisted. However, due to the nature of the financial structures of firms in the financial and basic industries, the study did not include their data. The final sample consisted of 291 firms, providing 22 927 monthly observations. Dividend-investing strategies were constructed using non-dividendpaying (Portfolio one) and dividend-paying firms (Portfolio two). Portfolio one and two were then further deconstructed into four groups based on monthly DY rankings. Portfolio one was represented by Group 1, whilst Portfolio two was grouped into the lowest, medium, and highest DYs and classified as Group 2 to Group 4 accordingly. The results obtained from statistical analyses performed in this study indicate that the level of DY appears to influence returns positively. Furthermore, after investigating the results obtained during opposing market scenarios, some important findings resulted. During bear markets no significant difference in abnormal risk-adjusted returns was observed for the portfolios and four groups, however, in bull markets the return for Portfolio two, specifically Group 4, was more than double the result for the non-dividend payers. This study, therefore proposes that firms should have a DY in the range of the highest market DY average for bull markets specifically. From the perspective of the potential investors, the study suggests that dividend-investing could allow for the generation of positive risk-adjusted returns during bull markets. / AFRIKAANSE OPSOMMING: Hierdie studie evalueer die moontlike invloed van stygende en dalende markte aangaande opbrengs op dividend-investerings strategie . Die studie se primêre doelwit is om die invloed van dividend uitbetalings op aandeel opbrengste te bestudeer. Sekondêre doelwitte ondersoek hoe die grootte van ‘n kontant dividend, soos gemeet in dividend opbrengs, die aandeel-waarde beïnvloed, spesifiek tydens bul en beer markte. Om oorlewingsydigheid te voorkom, sluit die steekproef genoteerde sowel as gedenoteerde firmas in vir ‘n tydperk van 1995 tot 2010. Aanvanklik was alle sektore van die Johannesburg Aandele-beurs (JSE) ondersoek, maar weens die komplekse kapitaal struktuur van finansi le en die basiese nywerheid sektore was hul aandeel inligiting uitgesluit. Die finale steekproef het ‘n totaal van 291 firmas ingesluit en 22 927 maandelike waarnemings verskaf. Dividend-investerings strategie was saamgestel deur nie-dividend-betalende firmas (Portefeulje een) teenoor dividendbetalende firmas (Portefeulje twee) te vergelyk. Die twee portefeuljes was ook verder onderdeel in vier groepe volgens maandelikse dividend opbrengstes. Portefeulje een was verteenwoordig deur Groep 1, terwyl Portfeulje twee opgedeel was volgends laag, medium, en hoë dividend opbrengstes en geklasifiseer as Groep 2 tot 4 onderskeidelik. Die resultate van die statististiese ontleding van hierdie studie dui moontlik daarop dat die vlak van dividend opbrengs aandeel waarde positief beïnvloed. Nadat die spesifieke bul en beer markte ontleed is, was belangrike resultate waargeneem. Tydens beer markte was daar geen beduidende verskil tussen die risiko-aangepaste opbrengstes van die twee portefeuljes en vier groepe nie, maar tydens bul markte het die opbrengstes van Portefeulje twee, spesifiek Groep 4, meer as dubbel dié van die nie-dividend betalers getoon. Die studie stel dus voor dat ‘n firma tydens bul markte moet poog om ‘n dividend opbrengs te handhaaf wat die hoogste gemiddeld van die mark verteenwoordig. Vanuit die belegger se oogpunt, stel die studie voor dat dividend investering stategie moontlik gebruik kan word om positiewe risikoaangepaste opbrengstes te genereer, veral tydens bul markte.

Thesis (MBA)--Stellenbosch University, 2008. / ENGLISH ABSTRACT: The purpose of this study was to investigate the relationship between dividend changes and operating cash flows in South Africa. Previous studies on the relationship in developed markets established that the main determinants of dividend changes are current year earnings and preceding dividend levels. The dividend changes-operating cash flows relationship was successfully studied in the developing market of Nigeria. The procedures and arguments used in this study were largely based on studies undertaken by Charitou and Vafeas (1998) and Adelegan (2003). The relationship was studied by selecting 60 companies that have been listed on the Johannesburg Stock Exchange from 1990 to 2005. A multiple regression model was used in this study to investigate the relationship between dividend changes and operating cash flows. The multiple regression results revealed that there is a significant positive relationship between dividend changes and operating cash flows. The results also revealed that there is a significant positive relationship between dividend changes and profits after tax and a significant negative relationship between dividend changes and the previous year's dividend yield. Relative to profit after tax and operating cash flows, the previous year's dividend yield has the strongest relationship with dividend changes. The strength of the variables in explaining dividend changes has changed over time. In the study, the multiple regression equation was estimated for three different periods, 1990 to 1993, 1994 to 1999 and 2000 to 2005. In the period 1994 to 2005, operating cash flows showed a significant positive relationship with dividend changes. In all three periods, the previous year's dividend yield showed a significant negative relationship with dividend changes and was also relative to profit after tax and operating cash flows, the strongest determinant of dividend changes in all three periods. In the period 1990 to 1999, profits after tax had a significant positive relationship with dividend changes. The results showed that operating cash flows, over time explain more of dividend changes than profits after tax. The study also investigated factors that have the potential to influence the relationship between dividend changes and operating cash flows. The multiple regression results revealed that growth prospects, levels of leverage and the size of a company did not significantly influence the dividend changes-operating cash flows relationship. / AFRIKAANSE OPSOMMING: Die doel van hierdie studie was om die verwantskap tussen dividendveranderinge en kontant uit bedryfsaktiwiteite te ondersoek. Vorige studies oor die verwantskap wat met betrekking tot ontwikkelende markte onderneem is, het bevind dat die hoof determinante van dividendveranderinge die huidge jaar se verdienste en die voorafgaande jaar se dividendopbrengste is. Die dividendveranderinge-kontant uit bedryfsaldiwiteite verwantskap is suksesvol bestudeer in die ontwikkelende mark van Nigerië. Die prosedures en argumente wat gebruik is in hierdie studie is hoofsaaklik op die studies van Charitou en Vafeas (1998) en Adelegan (2003) gebaseer. Die verwantskap is bestudeer deur 60 maatskappye te selekteer wat vanaf 1990 tot 2005 op die Johannesburg se Effektebeurs genoteerd was. 'n Meervoudige regressie model is in die studie gebruik om die verwantskap tussen dividendveranderinge en kontant uit bedryfsaktiwiteite te ondersoek. Die meervoudige regressieresultate het gewys dat daar 'n positiewe betekenisvolle verwantskap tussen dividend veranderinge en kontant uit bedryfsaktiwiteite is. Die resultate het ook gewys dat daar 'n positiewe betekenisvolle verwantskap is tussen dividendveranderinge en wins na belasting asook, 'n negatiewe betekenisvolle verwantskap tussen dividendveranderinge en die voorafgaande jaar se dividendopbrengs. Relatief tot wins na belasting en kontant uit bedryfsaktiwiteite, het die voorafgaande jaar se dividendopbrengste 'n sterker verwantskap met dividendveranderinge gehad. Die sterkte van die veranderlikes in die verduideliking van dividendveranderinge het met verloop van tyd verander. Die meervoudige regressie vergelyking is in die studie vir drie verskillende periodes geraam, naamlik vir 1990 tot 1993, 1994 tot 1999 en 2000 tot 2005. In die periode 1994 tot 2005 was daar 'n positiewe betekenisvolle verwantskap tussen dividendveranderinge en kontant uit bedryfaktiwiteite. Al drie periodes het 'n negatiewe betekenisvolle verwantskap tussen dividendveranderinge en die voorafgaande jaar se dividendopbrengs getoon. Die voorafgaande jaar se dividendopbrengs was ook relatief tot wins na belasting en kontant uit bedryfsaktiwiteite die sterkste determinant van dividendveranderinge in al drie periodes. Daar was 'n positiewe betekenisvolle verwantskap tussen dividendveranderinge en wins na belasting in die periode van 1990 to 1999. Die resultate toon dat kontant uit bedryfsaktiwiteite met verloop van tyd meer verklaar van dividendverandringe as wins na belasting. Die studie het ook faktore wat die verwantskap tussen dividendveranderinge en kontant uit bedryfsaktiwiteite potensieël kan beïnvloed, ondersoek. Die meervoudige regressieresultate het getoon dat groeimoontlikhede, hefboomfinansiering en die grootte van 'n maatskappy nie die verwantskap tussen dividendveranderinge en kontant uit bedryfsaktiwiteite betekenisvol beïnvloed nie.

Thesis (MBA)--Stellenbosch University, 2012. / Ever since listed companies have been allowed to buy back shares (since the Companies Amendment Act was introduced in 1999), a major question has been whether companies with extra cash should pay out dividends or buy back shares. The larger research project for the University of Stellenbosch Business School (USB) will evaluate this question by comparing the rand value of dividends paid to shareholders to the rand value of share buybacks and comparing the rand value of special dividends to the rand value of share buybacks. The research described in this report was conducted as part of the bigger research project on dividends and aimed to produce a provisional list of special dividends paid from 1999 to 2011 for all companies listed on the Johannesburg Stock Exchange. The list comprises only special dividends paid from earnings, hence the term „provisional list‟. The bigger research project to produce a comprehensive list of special dividends will include the following additional steps: 1. Determining payments from earnings and share premium. 2. Determining payments from earnings, share premium and special designated dividends (SDD). 3. Determining payments from earnings, share premium, SDD and statistically evaluated dividends. The present research showed that using databases alone would not yield viable data for research purposes. The researcher started to gather data from two databases and afterwards had to evaluate the Stock Exchange News Service (SENS) announcements to eliminate the discrepancies. Furthermore, the physical financial statements gave valuable information to produce the provisional list. The correct method to determine the true rand amounts for dividends is firstly to consult the annual financial reports and secondly to retrieve the SENS announcements. Then the entry can be verified by multiplying the dividend per share by the number of shares on the record date. This rand value can be found in the financial statements in the statement of changes in equity. The dividends paid out of share premium are easy to identify, as the entry will be specifically stated in the statement of changes in equity. The determination of special dividends is rather difficult, because the rand amount of special dividends are hardly ever published as such in the statement of changes in equity. The conclusion reached by the researcher is that the only method to obtain the correct entries for any financial evaluation is to consult the audited financial statements. Databases can be useful in obtaining some information; however, the only reliable resource to retrieve the final information is from financial statements.

We examine the existence of dividend clienteles in Sweden using a unique dataset containing yearly information on age, gender, income and portfolio composition of about 200 000 Swedish stockholders. The data covers the years between 2005 and 2010. More specifically, we investigate whether investor preferences for dividends differ depending on their age or income. Furthermore, we seek to establish if there are any differences in performance, based on abnormal return, between investors with different dividend yields. We find that age clienteles exist in Sweden; older investors hold stocks with higher dividend yields and invest a larger portion of their portfolio in dividend paying stocks than younger investors. We do not find support for the existence of income clienteles; low-income investors tend to invest in stocks with a higher dividend yield than high-income investors. However, we find that different income groups hold about the same portfolio weight in dividend paying stocks. Overall, we find no significant differences in performance within or between various age or income groups. The main finding of this paper is the identification of age clienteles in Sweden.

published_or_final_version / Business Administration / Master / Master of Business Administration

This study develops empirical models for comprehensive inflation effects on stock returns in the Japanese economic and financial framework. Basically these models deal with the two kinds of wealth effects and inflation risk premia. The wealth transfers are related to a tax system and other institutional constraints while the wealth-size effect is based on the more fundamental stock price determinant of the flows of earnings. The inflation risk premia are the additionally required part of returns due to relative uncertainties in common stock investment under unstable inflation. Based on the stock valuation theory and on the efficiency of stock markets, it is found that the net effect of wealth transfers appears in ex post stock returns if expected inflation shifts from one level to another. However, the effect of the inflation-caused wealth transfers will not appear in stock returns even in varying inflation if positive and negative wealth transfers are perfectly offset. The test result supports this offset. As the result of testing inflation risk premia, the stock market tends to compensate the premia of unstable inflation for investors. Finally the wealth-size effect relates anticipated real activity to inflation in monetary sector behaviors as well as anticipated real activity to stock returns in real sector behaviors. The intermediate variable to transmit inflation to stock returns is real activity. In this context, inflation is just the proxy for real activity which essentially determines firm values. Empirically the wealth-size effect is supported with the inverse relationship between inflation and real stock returns. For Japanese economy, however, the wealth-size effect is not explained by the standard theory of capital investment. Real activity is correlated to (profit) returns on existing capital but not related to corporate capital investment. Capital investment is independent of other real sector variables as well as inflation. The result is attributed to governmental policy and controls for corporate investment. Thus, the obtained relationship between stock returns and inflation includes less practical implication in investment behaviors.

Syfte: Syftet med denna studie är att testa sambandet mellan en koncentrerad aktieägarandel och låg utdelning bland aktieföretag på den svenska börsen. Vad som är unikt för just denna studie är att den genomförs på den svenska börsen samt den skattesats som skiljer sig mellan Sverige och exempelvis Finland där tidigare studier av samma karaktär genomförts. Metod: Studien har genomförts med en kvantitativ metod och en deduktiv ansats. Den finansiella data som används i studien har hämtats via databasen ”Retriever”, information om aktieägande har manuellt hämtats från ”Ägarna och makten” (Sundqvist, 2015). Resultat och slutsats: Slutsatsen innefattar en saknad av direkt samband mellan koncentrerat ägande och låg utdelningsnivå vilket besvarar syftet. Vad som kan lyftas fram som en eventuell förklaring är den skattemässiga aspekten gällande utdelning och kapitalvinst. Tidigare forskning som påträffat samband i andra länder har en skattesats som skiljer sig mellan utdelning och kapitalvinst vilket innebär skattemässiga fördelat att välja det ena framför det andra. Detta var en av de aspekter som var av stort intresse innan studien startade. Studiens bidrag: Denna studies teoretiska bidrag påvisar att sambandet mellan ägarkoncentrationen och företagens utdelning inte är självklart på den svenska börsen. Istället finner vi att det är huvudsakligen företagens finansiella nyckeltal som ligger till grund för företagens utdelning. Förslag till vidare forskning: Resultatet av denna studie föder ytterligare nyfikenhet kring möjligheter att forska vidare. Exempel på intressanta ämnen är Agnblads (2001)teori om det utländska ägandets påverkan på det framtida ägandet i Sverige. Även agentteorin och dess olika påverkan på företagen går att fördjupa sig i och studera på den svenska marknaden då ägandet är koncentrerat och en stor del maktfördelning sker. / Aim: The aim of this study is to test the relationship between ownership concentration and dividends in listed Swedish firms. Method: This study has a quantitative method and a deductive approach. The financial data has been collected via the database ”Retriever”, information about the ownership of the companies was manually collected from the book ”Ägarna och makten” (Sundqvist, 2015). Result and conclusions: The result of the study is that dividends may variate due to the independent variables. However, there is not a significant relationship between ownership concentration and dividends. Contribution of the thesis: The contribution of this study provides further information regarding ownership concentration and dividends, we find that the financial ratios of the companies have a larger impact on the dividends than the ownership concentration. Suggestions for future research: The result of this study adds alot of curiosity to the future studies about this subject. Our suggestions to future research is to elaborate Agnblads (2001) theory about foreign ownership and how it might affect companies in Sweden. We also propose to research further about the Agency-theory and which effects it has on the Swedish listed firms since we have a concentrated ownership.

This paper provides an empirical analysis of the stock price behaviour of firms listed on the Johannesburg Securities Exchange (JSE) around corporate events relating to final cash dividend change announcements over the period 2004 to 2009. Declared for the financial year-end, final cash dividend announcements either represent an increase, a reduction or no change relative to the previous year’s announcement. In this paper we analyse the stock price behaviour of firms that announced dividend reductions before and during the Global Financial Crisis of 2007 (GFC 2007). The pre-crisis analysis focuses on dividend reduction effects on share price during normal economic times and crisis analysis focuses on effects during economic downturn. We refer to the pre and during crises effects as firm-specific and systemic effects respectively. Studies about the general effect of dividend announcements on shareholder value are well documented; however our study is motivated by the fact that there has not been an abundance of forthcoming research in South Africa pertaining to how share prices have reacted to dividend reductions before and during the GFC 2007. We employ an event study methodology in the context of this emerging market to assess the share price behaviour to dividend reductions. Integral to an event study methodology in the corporate context, is the analysis of abnormal performance around the event date. Abnormal performance is measured by employing three widely used quantitative approaches namely, the market-adjusted, market model and the buy-and-hold abnormal return approaches. Based on daily closing share price information collected from iNet Bridge database, abnormal performance is calculated from 2004 to 2009 while controlling for the contemporaneous effect of earnings announcements (earnings data collected from Bloomberg database) occurring within 10 trading days of dividend announcement. The analysis shows that the market reaction is not statistically significant on the announcement day and that more negative returns occur during the pre-crisis period. Volatility of abnormal returns is higher during the pre-crisis period. The research does not support the Irrelevance Theory but seems to support the signalling hypothesis.