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The main objective of this study is to examine the impact of equity financing on the financial performance of Jordanian industrial companies. The study population comprised 393 board directors from 55 Jordanian industrial companies. Purposive sampling was employed to select 346 board directors for the study sample. Data were collected via an online questionnaire, and the study used a descriptive-analytical approach to examine the study hypotheses. The study concludes that equity financing posi-tively impacts financial performance. Also, each of the angel investors, retained earnings, crowdfunding, and ploughed-back profit positively impact financial performance. The study recommends that Jordanian industrial companies focus on retained earnings as a funding source; what helps is the lower costs of obtaining financing from retained earnings compared with other funding sources. This study is unique because, as far as the researcher knows, it is the first to look at how angel investors, retained earnings, crowdfunding, and ploughed-back profit affect the financial performance of Jordanian industrial compa-nies all at the same time or separately.

Objective: The article assesses the current way of presenting achievements (measured by comprehensive income) by selected joint-stock companies in the statement of financial position. This is done in the light of the concept of comprehensive income and the comparability and understandability of financial information. The article also presents the authors' solution for presenting comprehensive income. Research Design & Methods: The research method used in the theoretical part is a critical analysis of IFRS regulations (in particular IAS 1) and the literature thereof. The empirical part uses financial statements prepared for 2022 by selected companies listed on the Warsaw Stock Exchange. On the basis of those, a critical assessment of the information presented on comprehensive income and its components is presented. Findings: The research shows the lack of uniform solutions in the presentation of comprehensive income, especially in the context of the statement of financial position. The effect of such a state of affairs is the low quality of reporting information, and thus the limited readability of reports and the usability of information for stakeholders Implications/Recommendations: Presenting the value of the profit or loss and other comprehensive income directly in the structure of equity should be made obligatory. This would increase the readability of information on comprehensive income, and reduce the ambiguity stakeholders face in interpreting it. It would also ensure a close link between the elements of the financial statements, the layout of which is partly based on the concept of comprehensive income. Contribution: The authors' solution for presenting comprehensive income in the statement of financial position is the main contribution. [ABSTRACT FROM AUTHOR]

Copyright of Ruch Prawniczy, Ekonomiczny i Socjologiczny (0035-9629) is the property of Adam Mickiewicz University and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

Copyright of Arab Journal for Scientific Publishing is the property of Research & Development of Human Recourses Center (REMAH) and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

This study examines the trade-off between retained earnings (REs) and dividends in the Egyptian context to determine whether REs affect dividend policy and payout. Additionally, the study examines how the life cycle of a company influences the aforementioned relationships. The results of a multiple regression analysis indicate that REs are positively and significantly related to dividend policy and payout. However, when the company life cycle is introduced as a moderator, the results suggest a significantly negative relationship. Furthermore, a confirmatory test reveals that lagged REs influence dividend policy and payout. These findings carry significant implications for various stakeholders in Egypt. To the best of the knowledge of the authors, no study has investigated the causal relationship between REs and dividends in the Egyptian real estate context. [ABSTRACT FROM AUTHOR]

In some countries, a sizable fraction of savings is derived from corporate savings. Although larger, traded corporations are often co-owned by foreign portfolio investors, current international accounting standards allocate all corporate savings to the host country. This paper suggests a framework to correct for this misleading attribution and applies this concept to Germany. For the years 2012–2020, our corrections retrospectively reduce German savings and consequently the German current account surplus by, on average, €11.5 bn annually. This amounts to lowering Germany's average official current account surplus (€226.6 bn) across these years by approximately five percent. [ABSTRACT FROM AUTHOR]

Financing decisions and capital structure are very important for companies and are influenced by several factors. This study aims to examine the relationship between managers' financing attitudes (internal or external) and their financing policies. In this examination, the survey population consists of companies listed on Tehran Stock Exchange whose CEO or financial manager (at least one) was unchanged between 2019 and 2021. Redman et al.'s [30] questionnaire was applied to determine the attitude toward financing. Financing policies used by the managers were collected by referring to the audited financial statements of the companies. Totally, 51 usable answers were received from the respondents. The research hypotheses were dragging using a multivariate regression equation model in the form of panel data. The results show a significant relationship between the financing methods through retained earnings and debt with the attitudes toward financing from the place of retained earnings and debt. In contrast, the financing tendency through debt has no significant relationship with the policy of financing the stock issue through the issuance of shares. [ABSTRACT FROM AUTHOR]

Firms use cash flow primarily to finance increasingly persistent share repurchases. Such internal financing is accompanied by gradual increases in retained earnings in the capital structure, and results in high (low) repurchase (investment) sensitivity to cash flow. These effects are particularly pronounced among financially mature firms. The repurchase–cash flow sensitivity of US firms has increased steadily in recent decades, with steeper increases for financially mature firms. We find that repurchases are not generally associated with underinvestment. Moreover, a nontrivial number of firms would have depleted their retained earnings if they paid dividends instead of repurchased shares. [ABSTRACT FROM AUTHOR]

The book-to-market ratio is known as an anomaly variable in the financial literature. This variable has a high explanatory power in predicting the returns of companies in different capital markets across world; But understanding why it has the power to explain is still a matter of debate. In this study, we seek a clear understanding of the explanatory power of the ratio of book-to-market ratio in explaining the annual return of cross-sectional data of stocks on the Tehran Stock Exchange. Book value can be divided into two parts: retained earnings and contributed capital, which have different economic meanings for readers of financial statements. Our hypothesis is that the predictive power of the book-to-market ratio arises from a component of book value that could be a good proxy for underlying earnings yield. Using the method of Fama and Macbeth (1973), we regress the annual return of cross-sectional data of companies listed on the Tehran Stock Exchange for the years 2001-2019 on the ratio of book-to-market ratio and its two components. Neither component of book-to-market ratio could eliminate the predictive power of this ratio; however, the ratio of retained Earnings-to-market ratio could show predictive power along with the book-to-market ratio. We contribute to the literature by providing additional evidence from Tehran's Stock Exchange.1- IntroductionThe book-to-market ratio is known as an anomaly variable in the financial literature. It has appeared as a key explanatory variable with high explanatory power in predicting the returns of firms in capital markets across the world, however, understanding the mechanism through which this financial factor functions and its origin of the explanatory power is still a matter of research debates. Empirical researches on the returns and “book to market value” can be divided into two strands. The first group aims to examine the existence of abnormal returns on the ratio of "book to market value" in the stock markets. This stream of works aim to answer the question of whether the "book to market value" is able to predict companies' returns in capital markets or the returns is caused by other sources including random noise. Rosenberg et al. (1985) show, for instance, that in the US capital market, the strategy of the "book to market value" can yield abnormal returns for investors. In terms of this strategy, at the beginning of each month, the shares with a high "book to market value" are bought and the shares that have a low "book to market value" ratio are sold. A relationship between the ratio and average stock returns for the period 1981-1981 in the capital markets of Switzerland, France, Germany and the United Kingdom has also been observed by Coppole, Rollie and Sharp (1992). The second stream of studies on the "book to market value" seeks to understand the cause of its explanatory power. This issue is an active research area and is still subject of discussions and has been studied from various aspects. One of the most highly cited of them is Fama and French (1993), which attributes high returns in stocks with a higher magnitude of "book to market value", to higher systematic risk. In contrast, Daniel and Titman (1997) introduces the hypothesis of equity characteristics and by providing empirical evidence argues that the returns premia on high book-to-market stocks does not arises because of the co-movements of these stocks with pervasive factors. It is the characteristics of the share rather than the covariance structure of returns that appear to explain the cross-sectional variation in stock returns. So, these are not associated with greater risk tolerance. Ball, Gerakos, Linnaeus, and Nikolaev (2020) examines the "book to market value" through its components (retained earnings and contributed capital) in the US capital market. He argues that the ability of "book to market value" to predict the cross-sectional returns is not because of its intrinsic information contents, but it appears as an appropriate proxy for the actual profitability of the firms, because, the retained earnings component of the book value of equity includes the accumulation and, hence, the averaging of past earnings, instead the contributed capital-to-market has no predictive power. HypothesesWe contribute to the literature by providing additional evidence from Tehran's Stock Exchange. Our study aims to provide further evidence to clarify explanatory power of the ratio in predicting the variations of annual returns in cross-sectional data for stocks in the Tehran Stock Exchange. Our hypothesis is that the predictive power of the book-to-market ratio arises from a component of book value that could be an appropriate proxy for underlying earnings yield. Data and Identification methodologyWe use the annual returns and financial statements of all shares traded from the beginning of 2001 to the end of 2020 in Tehran Stock Exchange. Annual returns are calculated from price data recorded and reported in the “tseclient” software and accounting data are downloaded from “codal.ir” website. In this research, financial companies listed in the TSE have not been included in our working sample due to their special nature. Because, by nature of their activities, they have high financial leverage, which is normal for companies active in the financial field. The characteristics might be interpreted as a financially critical situation, whereas, the it is not so for firm that are active in financial fields. The information extracted from the financial statements is matched with the annual return of 1 month after the end of the financial year. The reason for this identification strategy is to make sure that the published financial information affects the share price. For example, if the company's financial year is at the end of March, we will assume that this information was available to the public at the end of April. Findings Following the statistical method of Fama and Macbeth (1973), we regress the annual return for cross-sectional data of companies listed on the Tehran Stock Exchange over the years 2001-2019 on the ratio of book-to-market ratio and its two components as well. Neither component of book-to-market ratio could eliminate the predictive power of book-to-market; however, the ratio of retained Earnings-to-market ratio could show predictive power along with the book-to-market ratio. Table (1) reports the Fama and Macbeth (1973) regressions in which, outcome of interest is returns and determinants of the regression are the log of "Book to Market Value", log of " Retained Earnings to the Market Value " and log of "Contributed Capital to Market value". We include a few controlling variables that are identified theoretically as determinants of returns.Table(1): Contributed Capital and Retained Earnings in the Fama and Macbeth Regression(1)(2)(3)(4)(5)(6)Variables-0.129**-0.128**-0.116**-0.0901**-0.126**-0.103**Log(Market Value)(-2.680)(-2.762)(-2.492)(-2.474)(-2.257)(-2.228)0.498** 0.210** 0.508** Log( Book-to-Maket)(2.744) (2.471) (2.342) 10.53***8.557** 9.914**Log(Retained Earnings to market Value) (2.992)(2.426) (2.890) 0.371***0.004060.255***Log(Contributed Capital) (3.446)(0.0438)(3.343) 0.619***0.560*** 0.415**Binary if profit>0 (3.382)(3.058) (2.256)2.973**-19.64***-15.47**2.429**2.959**-18.34**Constant(2.731)(-2.907)(-2.272)(2.825)(2.534)(-2.806) 3,7943,7943,7943,7943,7943,794#OBS0.1210.1440.1880.0990.1350.189R-Square212121212121# Groups*** p

This study seeks to identify key factors in formulating a dividend policy for a firm. We revisit the theory of stock valuation and identify and explore the impact of critical factors on a firm’s dividend policy. Next, we develop a framework and investigate financial data requirements to formulate such a policy and illustrate a methodology with an example of a case study for a firm which had never paid dividends but plans to change its policy. We recommend further research into issues in development and implementation of a firm’s stock repurchase plan in lieu of or to complement a dividend policy. [ABSTRACT FROM AUTHOR]

The study examined the impact that sound financial management practices have on the overall performance of manufacturing companies in Nigeria. In this study, an ex-post-facto research strategy was used, and secondary data was collected so that the researchers could investigate the link between the variables. The population of the research was made up of five samples that were randomly chosen from the population as a whole. The information was taken from the company's annual financial report, which covered a period of ten (10) years (2010-2020). Ordinary Least Square (OLS) regression analysis was used in order to make sense of the gathered information. It was discovered that financial management practices have a positive significant effect on Profit after tax (PAT) (p0.0021); financial management practice has a positive significant effect on retained earnings (p0.0415); however, financial management practice has no significant effect on debt-to-equity (p>0.7350). These findings were derived from the findings of the research. The research concluded that there is a considerable positive association between effective financial management practice, profit after tax, and retained profits. This relationship is robust. According to the results, it was suggested that the management of manufacturing organizations should try to place a greater emphasis on the practice of financial management in order to improve the efficacy and efficiency of their operations.

This paper aims to explore the capital structure issue and corporate value and to investigate the effect of capital structure change on corporate value. Panel data regression was applied in the research. The empirical results show that all proxies of capital structure have a positive but not significant influence on the Sustainable Owners Value Added Ratio (SOVAR) as a performance proxy for joint-stock companies whose financial instruments are listed on the capital market in Croatia. The study indicates that the owners’ equity has a negative and significant influence on the value of joint-stock companies in Slovenia while the long-term debt has a positive and significant impact on the value of listed joint-stock companies in the Czech Republic. Future work is needed to extend the analysis across different countries in the European Union and a long time series of data. Although investments are the most significant determinants of corporate value, the results indicate that 29.53% variability of the corporate value is explained by the variables owners’ equity and long-term debt which represent capital structure. These results provide evidence that the capital structure decisions affect corporate value as well as capital structure is relevant for corporate value in the selected members of European Union.

Research aims: This study aims to examine investor reaction to financing sources due to its pecking order theory hierarchy. Design/Methodology/Approach: This research used a purposive sampling method of manufacturing listed firms on the Indonesia Stock Exchange, which were tested utilizing Ordinary Least Square and SPSS software. Research findings: The results showed that the investor reacted negatively to internal financing measured by the firm's retained earnings. Conversely, this research found that investors reacted positively to external financing in measurement, leverage, and equity issuance. Furthermore, the results revealed that leverage had a more positive reaction than equity issuance. Theoretical contribution/Originality: This research contributes to the pecking order theory literature to test how investor reacts to which source of financing is chosen due to its hierarchy. There is evidence that Indonesian manufacturing firms had inadequate internal financing, which made investors react negatively, and investors tended to choose leverage over equity as external financing. Practitioner/Policy implication: Our study contributes to the firm's management to carefully choose financing sources to fulfill the investor interest. This research also suggests that the firm produces more profit to provide adequate internal source financing as the research results showed that investors preferred internal than external financing. Furthermore, when there is inadequate internal financing, the firm's management should use leverage over equity. Research limitation/Implication: First, our study employed total liability rather than debt to leverage measurement. Second, our study only provided evidence of negative reactions to show that the firm failed to provide adequate internal financing sources rather than examined the level of adequate internal financing sources.

Penelitian ini bertujuan untuk menganalisis faktor-faktor keuangan yakni profitabilitas, leverage, laba ditahan dan aliran kas operasi terhadap peringkat obligasi pada perusahaan sektor jasa yang terdaftar di Bursa Efek Indonesia dengan periode penelitian tahun 2017-2019. Penelitian ini menggunakan data sekunder dengan jumlah sampel sebanyak 19 perusahaan pada sektor jasa. Metode pengumpulan data menggunakan observasi non partisipan dan teknik analisis data yang digunakan adalah analisis regresi logistik. Hasil uji menunjukan bahwa profitabilitas berpengaruh positif terhadap peringkat obligasi sedangkan leverage, laba ditahan dan aliran kas operasi tidak berpengaruh terhadap peringkat obligasi pada perusahaan sektor jasa yang terdaftar di Bursa Efek Indonesia.

The paper highlights how the concept of retained earnings can actually lead to lower volume of profit in the long run as excessive ploughing of profit may lead to reduced dividend earning among the shareholders and create a sense of dissatisfaction among them. The paper reviews how a proportionate balance must be struck between retaining profits for organizational growth and paying dividends to keep shareholders satisfied. The concept reviews that excessive profit ploughing may cause firms to lose investors who may decide to withdraw their investments from the organization in the long term. The paper also highlights the relation between the level of capital availability and long term solvency level which can impact the profit from operations for the organization. [ABSTRACT FROM AUTHOR]

The research subject is a set of theoretical, methodological and organizational aspects of share capital accounting in agricultural production cooperatives. The aim of the work is to substantiate the methodological basis for share capital accounting, to identify its features, to develop proposals for its improvement. The methodological basis of the article are the general scientific and special economic and accounting methods of scientific knowledge: monographic, generalization, system and structural analysis and synthesis, grouping, graphic, accounting records, double entry, financial reporting. The results of the work.In the article the regulatory legal and organizational support of agricultural cooperatives activities, the methodology of their activities accounting and the specific features of reflection in accordance with the International Financial Reporting Standards aresubstantiated. The most typical operations that determine the characteristics of accounting for the cooperative form of management are considered. The possible ways of the enterprise accounting improvement by improving the organization of share capital analytical accounting are proposed. The field of application of results. The results of the study can be used for accounting and control of agricultural production cooperatives activities. They are also a prerequisite for designing strategies of their development and management. Conclusions according to the article. The content and features of the accounting methodology in cooperative entities are determined by the features of formation and changes of individual components of their equity, in particular share capital and retained earnings (uncovered loss), as well as by the emergence of new objects of accounting and economic relations. Share capital is the economic basis for cooperatives the existence. Therefore, we have proposed our own version of analytical accounting of share capital and cooperative members’ contributions. The format of “Share Accounting Book” used by most of the agricultural cooperatives investigated, does not fully correspond to the information needs of users. Therefore, it was proposed to improve this form of analytical accounting register. To organize the analytical accounting of land ownership, one should use the separate books for land registration. That will provide cooperative management and members with the detailed information onthe land ownership volume and dynamics for the whole business and in relation to its co-owners.

Aim of study: This paper determines the preferences for debt or equity ‒ common stock and self-financing ‒ that are shown by agri-food companies to finance innovation investment strategies and identify the monitoring role that third-party funding providers can play. Area of study: A sample of 41,109 Spanish SMEs (364,020 observations). Material and methods: The information was obtained from the SABI database, using the Generalised Method of Moments (GMM) estimator and a logistic regression like contrast methodologies. Main results: Spanish agri-food companies undertake innovation projects by financing these investments through owners’ resources, mainly from current common stock, as they are independent of these companies’ capacity to generate internal funds. This may be conditioned by the problems of severe negative self-financing presented by this sector in Spain which make it difficult to use retained earnings as a source of financing for new investments; 30% of these firms have a negative self-financing level of EUR 100,000 as the losses accumulated by economic activity are higher than the reserves provided. Research highlights: Agri-food companies prefer to use owners’ funds to finance innovation projects which allows them to maintain the concentration of power, a decision that is reinforced by the limitation to credit access due to innovation creates intangible assets that are not usually accepted as collateral by financial institutions. Meanwhile, given the particularities of these companies ‒ instability and liquidity problems due to the need for funds of operations ‒ the recourse to debt is an appropriate control mechanism to prevent overinvestment decisions.

This article addresses shortcomings in US tax policy: the interest tax shield (ITS) that favours debt over equity; the unfavourable tax treatment of retained earnings (RE) that is used for growth; and the inequalities in the taxing of ownership forms. Taxpayer wealth is calculated under the assumption that growth increases 0.78% with the enactment of the Tax Cuts and Jobs Act of 2017 (TCJA), which is an increase projected by tax experts. We discover that taxpayer wealth under TCJA with an ITS increases 15.69% beyond it pre-TCJA value; total federal tax revenue (TFTR) decreases 4.20%; and C corporations are no longer taxed more heavily than pass-throughs. If we replace an ITS with a 50% retained earnings tax shield (½RTS) where half of every dollar used for RE is shielded from taxes, we show that taxpayer wealth increases 4.51% and TFTR rises 3.15%. If we replace a ½RTS with an RTS (where 100% of RE is shielded from taxes), we find that taxpayer wealth and TFTR together increase 5.53%. The switch to an RTS further serves to equalise the taxing of pass-throughs and C corporations. Finally, switching from an ITS to an RTS does not materially alter the optimal debt-to-firm value ratio. [ABSTRACT FROM AUTHOR]

The use of fair value measures in financial statements embeds managerial assumptions about the future into the reporting process. This is particularly so for Level 3 measurements that are developed from financial models of future cash flows. This article documents a case where a firm bought a majority stake of 52% in November 2009 of a subsidiary where it already had an equity holding of 29% (i.e., acquired an additional 23%). The proportionate fair value implied for the 48% noncontrolling stake as well as the 29% prior equity holding in the acquired firm using Level 3 methodology was roughly triple the amount reported as Level 1 measures for these very same holdings. The discrepancy in valuation boosted the bargain gain at acquisition wiping out the retained earnings deficit of the parent firm. In addition, the acquirer reported a US$200 million (40%) impairment of the subsidiaries’ primary asset (housing stock) in November 2009 whereas the subsidiary reported the unimpaired value in its year-end financial statements in December 2009. While we agree that Level 3 valuations potentially provide useful information to shareholders, they can fulfill this role only if the disclosures can be effectively audited. Our primary motivation in writing this article is to show that fair value disclosures are not being audited sufficiently rigorously in practice and to make some suggestions on how these rules may be improved. [ABSTRACT FROM PUBLISHER]

In the life cycle theory of the company, it is stated that the Company which is at the established stage has the ability to make money beyond its ability to find profitable investment opportunities. The Company will distribute cash flow optimally to stakeholders in the form of dividend payments. The purpose of this study is to examine the effect of retained earnings ratio (proxied with retained earnings to total equity) on the probability and rate of dividend payments based on the life cycle of the firm. Companies listed on the Indonesia Stock Exchange period 2012 - 2016 are designated as research objects. Meanwhile, the sample is selected using criteria considered by the researcher (judgment sampling). Hypothesis testing is done by using the statistical method that is probit and tobit regression. The research findings show that retained earnings have a positive and significant effect on the probability and rate of dividend payments. However, the results of the study do not show significant evidence that retained earnings have a stronger effect on the probability and firm level of paying dividends. Dalam teori siklus hidup perusahaan dinyatakan bahwa Perusahaan yang berada pada tahap mapan memiliki kemampuan dalam menghasilkan uang melebihi kemampuannya dalam menemukan peluang investasi yang menguntungkan. Perusahaan tersebut akan mendistribusikan aliran kas secara optimal kepada stakeholders berupa pembayaran dividen. Tujuan penelitian ini adalah untuk menguji pengaruh rasio laba ditahan (diprosi dengan retained earnings to total equity) terhadap probabilitas dan tingkat pembayaran dividen berdasarkan siklus hidup perusahaan. Perusahaan yang listed di Bursa Efek Indonesia periode 2012 – 2016 ditetapkan sebagai objek penelitian. Sedangkan, sampel dipilih menggunakan criteria-kriteria yang dipertimbangkan oleh peneliti (judgment sampling). Pengujian hipotesis dilakukan dengan menggunakan metode statistik yaitu regresi probit dan tobit. Hasil penelitian kamimenunjukkan bahwa laba ditahan berpengaruh positif dan signifikan terhadap probabilitas dan tingkat pembayaran dividen. Namun, hasil penelitian tidak memberikan bukti yang signifikan bahwa laba ditahan berpengaruh lebih kuat terhadap probabilitas dan tingkat perusahaan mapan membayar dividen.

The subject of this research in broader terms involves the activities of credit institutions, the prudential requirements and their relation and dependence on the accounting methodology in banks. The broader subject of research serves as a basis for transition to more specific exploration regarding the subject of research – the capital and capital adequacy of banks. The major aim of this paper is to reveal strategies that the banks have been using since the beginning of the latest financial crisis to achieve higher capital adequacy levels. An empirical research of the capital components and capital adequacy dynamics of the banking system in Bulgaria over the period 2007-2016 has been conducted to see the actual reflection of the latest capital framework on the capital adequacy of the banking system, and, based on research results, to make conclusions about the existing internal policies and accounting practices that would have an effect on improving the equity of commercial banks and the banking system as a whole.

This paper traces the historical development of other comprehensive income (OCI) and comprehensive income (CI), analyzing how their evolution has unfolded. Emphasis is on authoritative pronouncements issued by the AICPA, FASB, and IASB. This paper discusses OCI applications from specific standards issued by the FASB and IASB. This paper also examines assertions from selected contemporary accounting books on this subject. [ABSTRACT FROM AUTHOR]

This paper shows that the availability of cash flows dominates the effects of cost of capital for investment at the firm level. Using an exogenous tax reform in Canada as a quasi-natural experiment, I find that a temporary and unexpected increase in the cost of capital for firms with low availability of retained earnings has no effect on investment of those firms. A subsequent direct increase in the availability of cash flows has large effects on investment. This suggests that internal financing constraints are binding for firms, as they prefer to use low cost retained earnings to finance their investment. [ABSTRACT FROM AUTHOR]

As part of the firm's general policy, dividend policy deals how the net-earnings after tax are distributed among the shareholders. This article explores the impact of dividend policy on the share price of the firm. Historically, two major academic streams prevailed in finance concerning the dividend policy: the proponents who advocated its importance; and the opponents who defied it. The basic methodological frame used is consisted of the Gordon's model for evaluation of stock prices elaborated in his work "Dividends, Earnings and Stock Prices". Two approaches were followed during the course of our research: macro-analysis with aggregate data; and micro-analysis with individual data. The application of the Gordon's model on aggregate data didn't reveal the true relationship between the policy of distribution of earnings and the movement of reference price index MBI-10. Further analysis of the macro approach detected a handful of possible reasons that led to the inconsistent outcome. Conversely, the regression with micro-data generated significant results proving that Gordon's idea for the relevance of dividend policy is still "alive" at least for the single resident company. [ABSTRACT FROM AUTHOR]

We study the effect of financial constraints on risk and expected returns by extending the investment-based asset pricing framework to incorporate retained earnings, debt, costly equity, and collateral constraints on debt capacity. Quantitative results show that more financially constrained firms are riskier and earn higher expected stock returns than less financially constrained firms. Intuitively, by preventing firms from financing all desired investments, collateral constraints restrict the flexibility of firms in smoothing dividend streams in the face of aggregate shocks. The inflexibility mechanism also gives rise to a convex relation between market leverage and expected stock returns. [ABSTRACT FROM AUTHOR]

We provide a new rationale for pyramidal ownership in family business groups. A pyramid allows a family to access all retained earnings of a firm it already controls to set up a new firm, and to share the new firm's nondiverted payoff with shareholders of the original firm. Our model is consistent with recent evidence of a small separation between ownership and control in some pyramids, and can differentiate between pyramids and dual-class shares, even when either method can achieve the same deviation from one share–one vote. Other predictions of the model are consistent with both systematic and anecdotal evidence. [ABSTRACT FROM AUTHOR]

The retained earnings hypothesis predicts that stock distributions accounted for by reducing retained earnings are a more credible signal of managerial optimism than stock distributions that do not reduce retained earnings. This study examines the costs of false signaling that are a necessary pre-condition for the hypothesis and finds them to be generally very small, calling the validity of the hypothesis into question for most firms. However, prior studies report broad-based market evidence consistent with the hypothesis. To resolve this apparent inconsistency, the study replicates and extends tests of the retained earnings hypothesis contained in three prior studies, and shows that the findings in support of the retained earnings hypothesis can be attributed to specification and measurement choices that bias the results in favor of the hypothesis. The support for the retained earnings hypothesis is weaker when the sources of the bias are removed. However, some support for the hypothesis remains for a limited set of distributing firms. [ABSTRACT FROM AUTHOR]

This article explores the nature and role of retained earnings in the growth of a business in the U.S. Retained earnings are not an asset. They are the profits that a corporation has earned, paid income tax on and elected to leave in the corporation. They can be paid to the shareholders in the form of dividends. Understanding accumulated-earnings tax is crucial to understanding the retained-earnings problem. The tax is a penalty tax levied to prevent their use to escape individual income tax through unreasonable accumulations of earnings. One of the first thing to understand about the tax is that it is not cumulative. It is calculated on the unreasonably accumulated income of a specific year. Another thing is that it is only raised when the Internal Revenue Service is auditing or examining the corporation's income tax return. The corporation does not have a positive duty to assess the penalty tax on itself. As with many tax laws, there are relief provisions to the accumulated-earnings tax. The first $250,000 of a regular corporation's retained earnings are exempt from the tax. For a personal service corporation that is a C corporation, the exemption is $150,000. Also, earnings accumulated to meet the reasonable needs of the business are exempt from the accumulated-earnings tax.

The article develops a theoretical model to reexamine the roles of earnings and book value for equity valuation and to explore cross-sectional differences in the properties of the valuation function. In the author's model, accounting conservatism causes book value to understate true asset values, which increases the valuation impact of book value. Some of the other topics discussed in the article include deriving equity value in terms of fundamental information variables, developing an accounting-based valuation model, examining cross-sectional differences in the behavior of the valuation function and comparing the model's predictions with existing empirical results.

The article details the development of a residual-income model showing how taxes on dividends affect the relative valuation of retained earnings against contributed equity, and the value of expected future earnings in the United States. The article suggests that overall firm value, and the relative valuation weights investors assign to retained earnings, contributed equity, and current earnings, all critically depend on dividend taxes. Evidence is presented that shows that investors take a proprietary perspective in valuation and in impute on unrecorded shareholder-level tax liability on retained earnings.

Maximizing the shareholder's wealth is an ultimate goal for every firm. It can be achieved through the company's action, usually through the periodic dividend payments which is determined by dividend policy. The objective of this study is to determine the impact of dividend policy on shareholders' wealth based on ten (10) Syariah compliance companies in consumer product sector listed at Bursa Malaysia within the period of 2007 to 2017. The market price per share (MPS) was used as the dependent variable. The dividend policy such as Earnings per Share (EPS), Dividend per Share (DPS), Return on Equity (ROE), and Retained Earnings (RE) were used as a proxy of dividend policy and represent as independent variables. This study used a multiple linear regression analysis at a significance level of 5% processed by Eviews version 9.5 and 10. From the results, it showed that all the variables proxies of the dividend policy has positive effect on shareholders' wealth (MPS). [ABSTRACT FROM AUTHOR]

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The aim of this study is to examine the impact of dividend payments on the value of firms listed on the Qatar Stock Exchange As well as we tried Define which forms of dividends policy are most influential on the firms value, Therefore It relied on a sample of 26 enterprises listed in Qatar stock exchange set in several sectors with the exception of the financial sector within the period lasting between 2013-2016, through the multiple and simple linear regression for the making of the tests, The findings show a relationship between dividend policy and the value of firms, its show also that the cash dividend considered as one of the most common forms having impact on the company's market value. This supports the theory of the appropriateness of dividends. [ABSTRACT FROM AUTHOR]

This paper provides a moral hazard characterization of the effects of lending relationship on cost of funds. I develop a model that studies the problem of financial contracting between a bank and an entrepreneur and isolates the effect of the lending relationship on the interest rates. The main result is that a bank-entrepreneur relationship has a positive effect on the interest rates, the optimal contract specifying a decreasing sequence of interest rates. The possibility of the entrepreneur to use partially his retained earnings improves the terms of the contract between entrepreneur and lender by reducing the difference between the two interest rates. [ABSTRACT FROM AUTHOR]

The article focuses on a study on bank dividend policy and holding company affiliation. The study compares the dividend policies of independently owned and bank holding company-affiliated commercial banks. The hypothesis tested is that there exists a significant, positive relationship between the amount of cash dividends paid by a bank and its affiliation with a holding company. The issue is an important one because the distribution of earnings as dividends reduces a bank's ability to generate capital internally and retained earnings have been the chief source of growth in bank equity capital.

The article investigates the relevance of the level of earnings divided by price at the beginning of the stock return period to examine earnings divided by associations. The article presents an analysis of returns and earnings associations based on Book Value Valuation Model and Earnings Valuation Model. The author discusses the criteria for selecting the sample for the models and the motivation of empirical studies of the relation between security returns and change in earnings or between unique returns and unexpected earnings.

A signalling equilibrium with taxable dividends is identified. In this equilibrium, corporate insiders with more valuable private information optimally distribute larger dividends and receive higher prices for their stock whenever the demand for cash by both their firm and its current stockholders exceeds its internal supply of cash. In equilibrium, many firms distribute dividends and simultaneously issue new stock, while other firms pay no dividends. Because dividends reveal all private information not conveyed by corporate audits, current stockholders capture in equilibrium all economic rents net of dissipative signalling costs. Both the announcement effect and the relationship between dividends and cum-dividend market values are derived explicitly. [ABSTRACT FROM AUTHOR]

This paper has attempted to show that more than the officially recognized inflation-adjustments are necessary before even the simplest financing ratios can meaningfully be compared over time. If these adjustments are made, the decline in profits and retained earnings after 1965 is far less than commonly measured and so is the increased reliance on external funds after 1968. Specifically it was argued that inflation-adjusted profits, retained earnings, and the gross flow of internal funds should include any reduction in real indebtedness. Adding this amount to the sum of retained earnings (including the IVA and CCA) and replacement-cost depreciation yields the correct measure of gross internal funds for purposes of financial analysis whether or not inflation premiums are fully reflected in interest rates. Correspondingly, that part of the increase in debt that merely goes to maintain the real value of past debt should be excluded from the external sources of funds if the relative importance of debt-financing is to be determined for periods with different inflation rates. While we certainly recognize that a rise in inflation rates and risk premiums can and probably does reduce the market value of the firm below the replacement cost of its assets in spite of the reduction in its real net indebtedness, such an outcome provides no justification for measuring the flow of internal funds incorrectly in the first place or for confusing nominal with real changes in net indebtedness. We are also aware that inflation in effect shortens the effective maturity or duration of the debt. As more frequent recourse to the credit market is required just to maintain real indebtedness or to finance the inflation premium in the interest rates paid by nonfinancial corporations, risks premiums may rise. Hence our point is not that a rise in the rate of inflation does not depress investment, but only that some of the most commonly cited reasons why it may do so may not apply at all... [ABSTRACT FROM AUTHOR]

A generalized functional form is developed here in order to determine the relationship among the stock price, dividends and retained earnings. The linear form (sometimes even the logarithmic linear form) is not a correct functional form for investigating the dividend effect of the electric utility industry. Moreover, the dividend effect is not significantly different from the retained earning effect for 60% of the cross-section results after the true functional relationship has been determined. Essentially, the GFF explicitly takes the interrelation between dividends and retained earnings into account; the functional form parameter also reflects the different relationship among the stock price, dividends and retained earnings under different economic conditions. In sum, it has been established that the previous studies of determining the dividend effect of the electric utility industry may have pre-judged an important issue--the correct functional form. While linear and logarithmic forms are easy to handle, this consideration alone is not enough to justify employment of either of these forms. In fact, it has been shown that there exists a generalized functional form which allows a compact analysis of the effects of choice of functional form on determining the dividend effect of the electric utility industry. [ABSTRACT FROM AUTHOR]

This study reports on an empirical effort directed at determining whether the legal union of two firms produces effects different from those which might otherwise accompany an informal purchase of both companies' shares by the portfolio investor. Although we direct our attention to mergers which are basically non-conglomerate in nature, extensive analysis reveals that merger fails to produce economically significant changes in the distribution of rates of return to the stockholder. Our attention centers on the risk attributes of the distribution, and we do not address dollar benefits of combination which are capitalized in the stock price with the announcement and subsequent consummation of the combination. This study follows several others in the literature which have attempted to assess the consequences of merger. The approaches taken to the problem are varied and the conclusions drawn are in some respects conflicting. [ABSTRACT FROM AUTHOR]

Using models drawn from organizational theory and institutional economics, this paper examines the extent to which firms borrow money. We argue that corporate borrowing depends on four factors: the expected return on borrowing, the availability of internal funds, the strategic orientation of the chief executive officer, and the firm's board composition. We formulate four hypotheses, which we test with data on 22 large U.S. manufacturing firms from 1956 through 1983. Retained earnings, the expected return on borrowing, the presence of a representative of a financial institution on the firm's board of directors, and the presence of a CEO from a finance background are all associated with the level of borrowing. The findings suggest that both economic and organizational factors affect the extent to which firms borrow. [ABSTRACT FROM AUTHOR]

Price deviations from basic valuation models based on accounting earnings and book value of owners' equity are used to test the intrinsic value explanation of the price-earnings and price-book value anomalies. Relative price deviations from the implied benchmark prices are used to assign years into high and low deviation groups. Traditional zero investment hedge portfolios are formed in each year, and the returns are compared across high and low deviation years. The high deviation years show significantly larger size- and risk-adjusted returns over four holding periods, providing strong evidence in favor of an intrinsic value explanation of the anomalies. The findings also indicate that the test periods chosen for earlier studies can play a role in the results generated. [ABSTRACT FROM AUTHOR]