Bank Dividend Policy as a Signal of Bank Quality

Authors

  • Robert Boldin Finance and Legal Studies Department, Indiana University of Pennsylvania, Indiana, PA 157051087
  • Keith Leggett Department of Economics, Davis & Elkins College, Elkins, WV 2624 l-3996.

DOI:

https://doi.org/10.1016/1057-0810(95)90013-6

Abstract

This article examines whether the dividendpolicy of bank holding companies is used as a signal of their quality. The study found evidence to support the dividend signaling argument-that is, that there is a positive relationship between bank dividendsper share and bank quality rating. Aaiiitionally, an inverse relationship between the dividend payout ratio and bank quality was found. Therefore, both aspects of a bank holding company’s dividendpolicy yields information about the quality of a fmancial institution.

Downloads

Published

1995-06-30

How to Cite

Boldin, R., & Leggett , K. (1995). Bank Dividend Policy as a Signal of Bank Quality. Financial Services Review, 4(1), 1–8. https://doi.org/10.1016/1057-0810(95)90013-6

Issue

Vol. 4 No. 1 (1995): Financial Services Review

Section

New Original Submission

License

Copyright (c) 1995 JAI Press Inc.

Creative Commons License

This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License.

Author(s) retain copyright and grant the Journal right of first publication with the work simultaneously licensed under a Creative Commons Attribution-NonCommercial 4.0 International License that allows to share the work with an acknowledgment of the work's authorship and initial publication in this Journal.

This license allows the author to remix, tweak, and build upon the original work non-commercially. The new work(s) must be non-commercial and acknowledge the original work.