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We extend the Maquieira and Danús (1998) study. In doing so, we use the model proposed by Rozeff (1982) to determine dividend payments. This model considers two opposites factors which may explain the dividend payout policy-- transaction costs and agency costs. We do a cross sectional analysis on a sample of fifty four Chilean public companies in the Santiago Stock Exchange during the period 1996-2002. We find that dividends signal future growth of the companies. Furthermore, the greater the percentage of shares owned by insiders the higher the dividend payout. Finally, we find that the past growth rate of the companies is negatively associated with the dividend payments. [ABSTRACT FROM AUTHOR]

We study the determinants of the dividend payout ratio considering a model that minimizes the sum of transaction and agency costs. Using a cross-sectional analysis on a sample of 60 Chilean public traded companies from 1986 to 1992, we examine the relationship between the dividend payout ratio and the expected growth rate, the beta, the percentage of shares helds by insiders and the number of stockholders. We find a positive and statistically significant relationship between the dividend payout ratio and the expected growth rate, which can be consistent with the signaling hypothesis. [ABSTRACT FROM AUTHOR]