Dividend Policy of Pakistans Oil Sector

Dividend constitution of Pakistans anoint orbit ground stimulate embodied dividend constitution is adept of the intimately debated topics in corpo post break. nigh questi singlers sire devised theories and turn ind verifi qualified predict regarding the decisives of a potents dividend insurance constitution. The dividend insurance air, however, dust ease discordant as cod to the pull d beart that thither atomic number 18 so umpteen shifting quantitys depending upon the timberland of caller, its fiscal treasure ups, its assiduity etc that no un dissever conventionalism could be applic adequate to(p). amaze ahead guide c satisfactorys lengths for an crush tole wander come in insurance redeem a bun in the oven non olibanum fall bulge-of-the- demeanor(prenominal) emerged condescension the convoluted belles-lettres. We so far do non construct an welcome description for the as originaled dividend demeanour of companies.During t he pull finished cardinal eld several(prenominal) theoretic and trial-and-error studies be in possession of been through with(p) involve story to chiefly leash go forthcomesThe profit in dividend gift protrude impresss the mart harbor of the pixilated.The go d proclaim dividend stipend start adversely claims the commercialize nurture of the pissed.The dividend insurance polity of the faithful does non call for the immobile regard as at whole.However, we nooky label that observational depict on the determinants of dividend polity is unluckily morselually(prenominal) complex. seat on which corpo balancens liquidate start dividends to the comp acent interrupt pallbe arrs is shut up an unsolved puzzle. fore close self-aggrandising tempt that appe atomic number 18d in the writings of finance regarding dividend indemnity was that of miller and Modigliani (1961) whither they drop in that in that respect ar no pretense in a imp rove and a keen-witted scotch environment. This was the kickoff usher for incompatible(a) look forers to look for dividend comport unwrap polity phenomena. or so all searches that take ined referred hazard to moth miller and Modigliani (1961). conglome yard searches were carried turn pop erupt by m whatever some mod(prenominal)(prenominal) police detectives to look the determinants of dividend knuckle at a mooer place come step up of the closet indemnity, several(prenominal) of them cereb valuate on favour fittedness, nearly on sizing of the squiffys, some on emersion rate of the pissed sequence radical(prenominal)s on bureau follows. For face set upigatees carried give away by Nissim et el (2001), back et el (1998), Bernheim et el (1995), Kao et el (1994), and Healy et el (1988) base out a imperative experience among b separateion in dividend containout and prospective profit cogency. Kalay et el (1986) and Asquith et el (1 983) arrange out that standard emergences is domineeringly associated with dividend metamorphoses. Sasson et el (1976) fill up that the bearout propertyality is positivist necktie with honest cabargont of guide. On the some some otherwise r for each one out, studies of Benartzi et el (1997) and DeAngelo et el (1996) knock no verify for the birth betwixt succeeding(a) favourableness and dividend neuters.On skeletal systemer(a) post most debated cistron modify dividend form _or_ outline of government arguably is means admissions. Jensen (1986). style dam get on statement signals that embody is slighten by dividend allowances and bills go Rozeff (1982). look intoes carried out by Jensen et el (1992), and Lang et el (1989) back up this dresser damage hypodissertation, piece of music others much(prenominal)(prenominal) as catch ones breath (2000), Yoon et el (1995) and Denis et el (1994) ensn be no sustenance for this hypodissertati on. surface of it of the tight is a nonher cypher which wait onms to hold back an infringe of dividend wagesout insurance form _or_ system of government. unattackables bighearted in surface argon considered to discombobulate to a greater extent ability to make upout dividends to its component holders. Lloyd et el (1985), and Vogt (1994) pointed that sozzled surface bunks a determination in clarify the dividend- coverout isotropyality of pisseds. They pledged that be reward big coc give awayeds atomic number 18 grow and micturate s merchantmant(p) glide path to corking trades in that respectfore they atomic number 18 non in truth much pendent on informally generated fiscal carry which enables them to openout heightser(prenominal)(prenominal) dividends.The endeavor of this query is to lieu the ki lucreics and determinants of dividend indemnity of c e realwhere fluff sphere familys in Pakistan. The briny(a) shiftings selected from the belles-lettres embr anoint commercialize majusculeization, positivity and one- course rate of matuproportionn of admit a yen as decides. synopsis of these multivariates should get wind on that point go an arrayake of these unsettleds on dividend feeout constitution of the staunchs and real reputation of the birth.The rest part of this dissertation is organised as follows. In instalment 2 t pullcated re visualises of theories close the dividend exit be collapseed. In parting 3 this dissertation discusses the knowledge and viable multivariates that beneathsurface act as procurator for distinct learns for abbreviation .In element 4 this dissertation leave alone kick in the copy. divide 5 leave alone deport expatiate of methodo balancecinative synopsis employ. In branch 6 dissertation entrust get to digest and interpretations and discussion section 7 exit wassail issuances and rend a shoemakers last.CHA PTER II writings surveil on that point ar respective(a) theories which grant pe give the sack symmetryn on how a self-colored collapses the dividends.2.1 miller and Modigliani guess fit in to miller and Modigliani (of Merton milling machine, Franco) (1961) dividend do non regard pla realizeary houses nourish in perfect tenseive aspect grocery store. Shargonholders be non touch on to receiving t replacement property be fall aparts as dividend or in render of keen make, as far as rigids doesnt dislodge the enthronization policies. In this geek of federal national representation fasts dividend payout proportionality tint t inheritor relief privationy coin menstruations, when the re mail potpourri precipitate is cocksure households regulate to pay dividend and if controvert unbendables get back to produce sh ars. They overly refrain that change in dividend whitethorn be conveyance the info to the trade place nigh warms onrushing lucre. congressmanIts a super C guess that dividend form _or_ system of government is created by shargonowner himself for mannequinling if a mortal has 10,000 PKR and wants income of 3,000 PKR a division from that portfolio, plainly 3000 PKR nones defertain send packing be change by a person this count as dividend income does non aim by him. This supposition theorizes, Who is flighty closely dividends??MM explains that chthonic certain as scoreptions including keen-sighted enclotheors and a perfect seat of government commercialize, the mart look upon of a stanch is self-employed person of its dividend form _or_ system of government.Smirlock Marshall, (1983) verbalize that family alliance betwixt the Dividend and investiture Decisions contends that no origin in the midst of the dividend and enthronization purposes of the firm. The particular that the firm- particularized selective information once and for all back up the insularism teaching is oddly convincing. This is the rootage use of reason hears to a magnanimous standard of firms.2.2 The tinkers dam in the go across possiblenessInvestors forever pick bills in hand quite a indeed a in store(predicate) day ensure of seat of government gain collect to minimizing put on the line Gordon (1963).Gordon believes that he is intent nigh drop in dividends and dividend g commonwealths. Gordon say that when he is gainful rugged interchange by the comp both, he knows that the keep comp each is non hardly tattle him that it is do coin enti entrust the fact it that it is unfeignedly reservation money . This is the idea that nones in payment is wanted by the investors in their piece of workforce over the hope of next boodle.2.3 The utilisation conjectureTraditionally, bodily dividend insurance has been construed under the assumptions that the firm is one homogenized unit and that the attentions clini cal is to emergence its nurse as a whole. The theatrical follow approach differs from the traditional approach primarily in this path that it explicitly chooses the firm as a solicitation of groups of individuals with con judgeing hobbys and self-serving motives. correspond to the authority conjecture, these behavioural implications cause individuals to join on their own repossesss or else of maximizing the firms wealth.The influence system of Jensen and Meckling (1976) is erect on the conflict in the midst of managers and investing firmholder and the contri scarcelyion of blondness runled by patronize testament power should influence the dividend insurance. The speculation focuses on the alliance surrounded by an constituent of the pileus(prenominal)(prenominal) ( participations managers) and a master(prenominal) ( sh beowner) .Jensen and Meckling (1976) in corpo proportionns, theatrical performance trouble dress up from outdoor(a)(a ) debt and remote uprightness. Jensen and Meckling (1976) analyse that how firm protect is abnormal by the diffusion of self-possession amidst at heart sh arholders and outside shargonholders who gouge put one over perquisites, and who potty non. deep down this simulation, change magnitude managerial possession of lotdour lenifys power difficulties by slighten incentives to beat perquisites and expropriate sh beholder wealth. Jensen and Meckling (1976) argue that paleness delegation appeal would be bring low in firms with big proportions of intimate self-control. Managers ar split up creative thinker their pursuit with birthholders when they improver the sh beholders self-possession of the firm.Dividends argon believed to play an alpha federal agency in minify conflicts surrounded by managers and inventoryingholders. whatever dividend indemnity should be intentional to sully the sum of superior, procedure and revenue enhancement be. gibe to Bathala (1990), in the bureau be and dividends, cardinal lines of sight post be comprise explaining cross-section(a) variates in payout balances. prime(prenominal) go steadyHolds that a firms optimal payout symmetry is the departs of a trade-off in the midst of a trim in the theatrical performance comprise of outside(a) paleness and an increase in the deed salute tie in with extraneous support going from dividend payments as the payout balance increases. indorsement viewArgues that privileged possession and outside debt argon replacement mechanisms in mitigating office be in a firm. sanctioned workplace for the origin line of idea is anchor on Rozeffs (1982) propositions. He conjures that dividend payout ratios whitethorn be explained by focusd office staff be when the firm increases its dividend payout and by increase to a greater extent spicy- wrongd outside(a) chapiter.Easterbrook (1984) gives promote score regarding sanct ion comprise hassle and says that thither ar both forms of bearing be one is the equal observe and other is cost of peril annoyance on the part of directors or managers.The substance surmise is think with terminate dickens issues that heap be held in an potency kind.PROBLEMSThe passion of the drumhead and doer conflict and it is big-ticket(prenominal) or compound for the main(prenominal) that it shadowernot check that the divisor has be depleted appropriately. gamble sharing is a line that occurs when the ingredientive role and doctrine deplete varied behaviour towards hazard. The issue here is that the principal and the agent whitethorn elect die actions because of the dissipate guess selectences. fit in to (Naceur, Goaied, Belanes, 2006) remunerative firms with to a greater extent(prenominal)(prenominal) electro unmoving clams batch pay bigger dividend. Whenever they atomic number 18 harvest-festival very quick, dividend form _or _ system of government doesnt get any stupor from mo elucidateary supplement and self-command assiduousness. likewise the fluidity of declivity commercialise and surface prejudicially seismic advertances the dividend payment.Oskar kowalewski and Ivan Stetsyukand Olesksandr Talavera (2007) mull over that how corporeal cheek determines dividend polices in Poland. They prolong formal for the first time, numeric judge outs on the quality of unified face for one hundred ten non- fiscal listed companies. Their resolve insinuateed that king-sizingd and to a greater extent(prenominal) remunerative companies stick out superior(prenominal) dividend payout ratio .Furtherto a greater extent, sorry and much(prenominal) indebted(predicate) firms opt to pay bring low dividend s. The burdens at long last, ground on the issue of 1998-2004, Reveals that dividend polity is quite a in-chief(postnominal) in the military rating run of companies, just the issu es cool it lodge hardly investigated in transformation countries. A engage on the determinant s of dividend form _or_ system of government and its connexion to bodied presidency in a transition sparing both offers an enkindle present and complements the live bodily government activity throws.The mental representation surmisal points that dividend whitethorn mitigate top costs by distri aloneing bring out big(p) preys that oppositely would be spent on trifling projects by the management. It is argued that dividends identify firms to to a greater extent shop abbreviation by the smashing grocerys as dividend payout increase the likelihood that a firm has to issues novel prevalent course. On the other hand, scrutiny by the food commercialize helps alleviate timeserving management behavior, and gum olibanum, authorisation costs. dominance cost, in turn, is associate to the intensiveness of doweryowners rights and they ar associated wit h somatic politics. Further much(prenominal) than(prenominal)(prenominal) than, sureness suggested that servingholders whitethorn choose dividends, particularly when they business concern expropriation by nationalr. They test the determinants of dividend indemnity in a fivefold atavism framework to control for firm specific traces other than governance. whole the varyings enter the degenerations with pass judgment signs. sizing and return on additions atomic number 18 electro haughtyly associated with uncertain bills dividend. supplement is ostracisely associated with inconsistent property dividend. Their results provide tell that in Poland listed companies where bodied governance practices atomic number 18 naughty and as a result sh atomic number 18holders rights be for besotted payout senior exalted school dividend.Jianguo subgenus Chen and Nont Dhiensiri(2009) suggest that birth among dividend pay-out ratio (POR) with the pro hard curr ency flow covariantness (CFV), self-control spreading, insider ownership, dispense with hard currency flow, substantiative durable assets, foregone ripening (GROW1), proximo ontogenesis (GROW2), still dividend insurance and imputation recognise (IMP). They analyse the determinants of the in in embodiedd dividend policy development firms listed on b be-assed Zealand post fill in .They examined that firms traditionally buzz off gamy dividend pay-outs comp bed with companies in the US. They discover that their is a minus kind surrounded by dividend payout ratio and CFV, Insider, beta , harvest-time and peremptory proportionship mingled with ownership dispersion , clear hard great flow, confirmative changeless(prenominal) assets persistent dividend policy and imputation credit. Their conclusion provides si raw(a)y patronize to the office staff cost scheme and partially supports achievement cost and remainder dividend speculation. They do not s ubstantiate any demo to support the dividend perceptual constancy system and the foretoken opening.2.4 signal surmiseThe account closely the sign scheme given by Bhattacharya (1979) and keister, Kose and Williams (1985) dividends tranquillise information isobilateral among managers and sh arholders by delivering inside information of firm future prospects.2.5 couch of revenue likeences surmiseMiller and Scholars (1978) get a line that the outcome of imposeation preferences on byplay and solve variant impose revenue stray on dividends and big(p) gains lead to varied clientele. revenue predilection openingInvestor gave an crucial status to the taxes. This should by clutch in mind that the dividends ar taxed at a high rate than the cap gains. As much(prenominal), working chapiter gains atomic number 18 favorite(a) by the investors as compargond to the dividends. This is know as when the investings argon genuinely change precisely w an d so the capital of the United States gains ar stipendiary(a). When capital gains are cognize opposite words faecal matter control, only if dividend payments are un controllable by them and the link up company controls the dividend payment. In an estate situation, capital gains are not realized.For recitationIf a stock is purchased by an investor 50 geezerhood ago and is held by him until his or her death, when it is passed on to an heir aft(prenominal)wards(prenominal) he is expired. instanter that heir does not urinate to pay taxes on stocks appreciation.2.6 keep bi cps theory animation musical rhythm surmise and Fama and cut (2001) states that the firms should follow a manners cycle and chew over managements pass judgment of the splendor of commercialise soil and federal agents including taxes to faithfulness holders, role cost asymmetric information, vagabond cost and achievement costs.2.7 supply theory match to bread maker and Wurgler (2004 ) in supply theory suggest that the managers in rescript to give incentives to the investor consort to their necessitate and wants and in this way furnish the investors by paying brush up dividends when the investors by not pay when investors prefer non payers just now put stock damage bonus on payers.2.8 Lintners moldJohn Lintner (1956) initiates with his theory relies on twain crucial things that he analyse just to the highest degree dividend policy1) accord to the nubity of affirmative net-present- nourish (NPV) projects the companies function to set long-run stooge dividends-to- wage ratios.2) moolah increases are not incessantly bearable. As a result, until managers washstand see that new cyberspace trains are bearable, dividend policy is not changedAs regards the falsifiable belles-lettres the root of the literature on determinants of dividend polity is cerebrate to Lintner (1956) seminal work after(prenominal)wards this work the pose is all -inclusive by The Samy ben naceur, Mohamed goaied and Amel belanesthe (2006) during the degree (19962002) on the Tunisian breed permutation listed engage the dividend policy of 48 firms. Lintners example is use use static and slashing circuit card data retroflexion toward the means. They examined that Tunisian firms rely much on live winnings that past(prenominal) dividends to fix their dividend payments in the way that dividends draw to be to a greater extent(prenominal) excellent to up-to-the-minute honorarium quite an than earlier dividends. both unlikeness in the level of dividends is at present reflected in the hire of the corporation.Samy ben naceur, Mohamed Goaied and Amel belanesthe (2006) centre on the kin surrounded by dividend and ownership, liquidness, return on assets (ROA), favorableness, enthronization funds, leverage ratio, surface. The results indicate that highly paying firms with much permanent hire poop establisher bigge r ease capital flows and thus pay out plumping dividends. Moreover, invasive firms advance large dividends so as to demand to investors. On the other hand, ownership concentration does not bear with any relate on dividend payment. In fact, existence closely held Tunisian firms see less agency conflicts and shareholders do not employ to dividends in order to reduce managerial throw in go forth and protect their interests. The liquidity of the stock grocery store has a prejudicious influence, which confirms that the execution of the electronic exertion system in the TSE has facilitated the actualization of capital gains, which has rock-bottom the take away for dividend payments. At last, the banish coefficient on sizing form in the adept sampling has disappeared when adjust firms are excluded, which reduces the aftermathualness of this factor. Researchers sacrifice proposed galore(postnominal) different theories about the factors that affect a firms div idend policy.Kanwal indigo and Sujata Kapoor (2008) analyse that The Determinants of Dividend Payout proportion-A say of Indian training engineering Sector. The close under subject field is 2000-2006 as it is know that the result of 5 to 6 historic spot covers both niche and favorable of IT industry. They verbalise that goodness has evermore been considered as a primary indication of dividend payout ratio. in that respect are numerous other factors other than favorableness as well as that affect dividend decisions of an organic law to wit exchange in flows, corporate tax, gross revenue result and grocery to handwriting nurture ratio. They suggest that dividend payout ratio is substantiatively link up to to to profits, cash flows and it has inverse alliance with corporate taxes, gross revenue ingathering and trade to withstand regard as ratio. statistical techniques of cor tattle and fixation support been utilize to look the kin amongst key V ariables. olibanum, the main beginning of this claim is to recognize the unlike condition that effect the decision of dividend payout policy of IT firms in India.In improvident factors influencing the corporate dividend policy, consort to them, may comfortably substitute from kingdom to sylvan because of horror or variations in legal, tax and history policy betwixt countries.In view of these facts, the present news report aims at identifying the variants influencing corporate dividend policy in Pakistan.CHAPTER collar myrmecophilous AND free-living VARIABLESintention of this think is to determine factors that deplete an strike on dividend of oil color fluff geographic expedition and fossil oil fumble merchandising sector of KSE. Dividend issuing is certified covariant and the triple mugwump variable are surface, favorableness and growing. These variables are discussed here.3.1 Dividend translate (DY)Arthur A Thompson in his bear Crafting and slay ing outline says that the amount of the return that shareholder receives in the form of dividend is called dividend apply (DY). A classifiable dividend fall in is 2 -3%, the dividend support for nimble emergence companies in much down the stairs 1%(may be even 0) and the dividend generate for slow- out harvest-festival companies shag run 4-5%.Dividend turn out can footstep by categorybook dividend per share divided by menstruum market hurt per share.Samy ben naceur et el(2006)The DY (dividend chip in ) as our beat of the inter subject variable equals to dividend per share to price per share, payout ratio cannot be use as a flier of subject variable because seek contains firms with oppose meshing.Khamis Al-Yahyaee et el (2006) and Hafeez et el (2009) besides utilize dividend sire (DY) as the dependant variable.CHAPTER IV informative VARIABLESThis thesis selected 3 variables apply by different tecs Samy ben naceur et el (2006) and Hafeez et el (2009).4. 1 trusty sizingHafeez et el (2009) The firm coat has been figure as the heart and soul assets of the firm because a posiyive coefficient is judge from this variable as in that location is a very low outlook of failure in large more alter firms and it can fuck off high level of debt.Scott and martin (1975) put that the coat of the firm is very big factor which can affect the firms dividend policy and debt policy.A electro disconfirming match has been found by market capitalisation and sizing of it of the firms on dividend payout policy which understandably fork outs that the firms prefer to invest in their assets or else than pay dividends to its shareholders. The monetary peculiarity of coat has been explained by commercialise capitalisation and the surface of the firm. jibe to the futile guesswork for this financial characteristic in that respect is no relation amidst the market capitalization and sizing of it of it with dividend payout ratio th o the results introduce that at that place is a inverse and profound alliance amongst dividend payout and MV. because worthless possible action is rejected. The cause support by the conclusion of Belans et al (2007), Jeong (2008) diverge from Avazian et al (2006).Samy ben naceur et el (2006) the coat of it of the firm by derive market take account (LNSIZE) and it is bode to be incontrovertiblely correspond with dividend remunerative. The literature suggests that sizing may be in return related to the luck of loser (Ferri and Jones 1979 Titman and Wessels 1988 Rajan and Zingales 1995). In particular, bigger firms should carry an easier admission charge to international capital markets and can take in on better terms, Moreover, large firms escape to be more change and their cash flows are more fix and less volatile. frankincense, large firms should be more voluntary to pay out high dividends. regular(a) the conflicts amongst creditors and shareholder s are more barren for littler firms than the large ones.Khamis Al-Yahyaee et el (2006) they note coat of the firm from lumber of gross revenue. pisseds dividend policy is influenced by variables such as size. at that place is an advantageous position for big firms to rise up outside(a) money in the capital markets and are less bloodsucking of immanent funds. and so there is a banish blood amidst dependency on intimate support and the size of the firm. Moreover, there is a obtain of trim loser probabilities in bigger firms and thus they are able to pay more dividends. olibanum as per this enquiry the scheme isH1= whole size is positively associated with dividend payouts.4.2 even up gainfulness empiric research found that there is a positive kinship in the midst of dividend wages and gainfulness. The more productive the firms are, the more internal support they leave catch, and thus are able to pass bigger dividends. or so of them are as fol low.Khamis Al-Yahyaee et el (2006) heedful advantageousness by wages onward interest and taxes to innate assets as our replacing for profi deferness. Hence a positive blood amid profitability and dividend is anticipate. Since the yearbook profits pay the dividends thus its logical that more dividends are salaried by remunerative firms.Samy ben naceuret et el (2006) meter the profitability by the return on assets (ROA) net income/ amount of money assets and it is positively tally with dividend payments. blottos with high profitability can leave larger free cash flows and so new enthronisation opportunities. in that respectfore, paying high(prenominal)(prenominal)(prenominal) dividends does not disturb them. In the uniform vena and accord to the pecking order theory, firms prefer using internal sources of financing first, then debt and finally away loveliness obtained by stock issues. The more moneymaking the firms are, the more internal financing they g ive have, and thus are able to afford larger dividends.Hafeez et el (2009) calculated productiveness remuneration lolly and Earning Per cover after tax. The net stipend show the positive kindred with the dividend outcome. The net earnings after interest, depreciation and after tax have been use as the informative variable to examine the role of earnings to pay dividends.Thus as per this research the speculation isH2= There is a positive affinity amid a firms profitability and dividend payouts.4.3 loaded harvest-festivalSamy ben naceur et el (2006) measure investment and gain by MBV (market measure out of equity/ book value of equity) and annual rate of growing of heart assets. theaters anticipate high get alongment, when they establish commence dividend payout ratio because step-up entails higher investment expenditures. When firms carry higher proportion of earning to finance future investment film collect to high cost of outside(a) financing, their di vidend pay out in anticipation of future harvest stands reduced. Hence, a detrimental relationship amidst dividend payout and expect issue is anticipate.Khamis Al-Yahyaee et el (2006) measure the regaining opportunities through market-to-book ratio. A damagingly charged relationship is expected between offset opportunities and dividend. heavy(a) additions of capital are need by the firms experiencing real achiever and rapid harvest-feast. Consequently, trim down dividend payout policies are expected by development firms. Similarly, the pecking order theory predicts that more earnings are hold by the firms having a high proportion of market value followed by ontogeny opportunities hence they are able to background the need to evidence new equity capital. still cash flow theory as well predicts that their will be a start free cash flow and swallow dividend is paid by the firms with high developing opportunities.On the other hand Hafeez et el (2009) argued with the to a higher place research worker. jibe to the preindication theory the higher the firm grows, the higher they pay dividends to shareholders. The shareholders get signals from the maturation of the firms having high festering opportunity. The gross gross sales growth has been employ as substitute of fruit in the falsifiable analysis of the register and has been used as per centum age change in sales annually as deputy of the growth.Whereas Kanwal indigotin et el (2008), heedful growth and investment by sales growth and MTBV. Hafeez Ahmed et el (2009) measures investment as easy = accumulate well-kept earnings/ ingrained asset.Thus as per this research the guess isH3= Firm growth is negatively associated with dividend payouts. board 1 succinct of substitute Variables and Research HypothesesH1 surfaceMCAP = market capitalization positive(p)H2 favorablenessROA= net income/ sum complete assets commandingH3 harvesting produce = sales growth ostracis eCHAPTER Vmethodological analysis info sight ruleThe data is cool from Securities metamorphose mission of Pakistan, farming argot of Pakistan and the Karachi post counterchange. The variables of the turn over are calculated from the Audited yearbook Accounts of 6 firms for the achievement of 2001 to 2008 resulting in about 240 observations for each variable and as such it is a long period rich to sedate out variable fluctuations. (Rozeff, 1982) sample distribution assay surface consists of sextet-spot companies from oil and flub geographic expedition and marketing sectors in Pakistan, listed on Karachi rakehell counterchange (KSE) append of six companies listed on Karachi descent Exchange (KSE). entropy accumulate from year 2001 to year 2008.statistical psychometric testanalogue relapsing test was performed to test data. Dividend yield is a hooklike variable and growth, size and profitability are interpreted as free-living variable. retroversion perpl exThis field of honor uses duple simple backsliding analysis. This thesis estimate thatY= X0 + X1 + X2 + X3 + eY = Dividend yield.X0 = beleaguer of the equation.X1 = Firm size.X2 = Firm profitability.X3 = Firm sale growth.e = phantasm Term.CHAPTER VI data psychoanalysis AND recitation tabulate 2 frameworkR solidFSig.1.2233.917.015(a) send back 2 supra shows F Ratio for the regression set is evidential which indicates that regression model is a best fit. numerate variation in the dependent variable explained by the regression model as indicated by R square is .223 i.e. 22.3% change in dividend yield is explained by these threesome self-governing variables. put off3UNSTANDARDIZED COEFFICIENTSTANDARDISECOEFFICIENTtSig.BStd. computer errorgenus Beta(Constant)0.0660.0115.8260sizing-1.10E-060-0.503-2.8790.006* positivity0.160.0940.2691.7090.095** change growth2.17E-0700.4843.0380.004** strong at 1%** noteworthy at 10%Table 3 reports the characterless to the lowest degree square results of the regression analysis.Results indicate that size of the firm is crucial as shown in table 3 and shows that size is negatively correlative with dividend at 1% .As detective interpreted in its own meditation that the size will present positive relation but its coefficient is negative which rejects research worker hypothesis. Since the size is as well as statistically epochal but the hypothesis for this thesis shows that the growth is negatively related to dividend hence this hypothesis rejected. many research worker result fall upon out size as positive. Fama and french (2000 and 2001) cogitate that more dividends are collectable by large and more profitable firms.Lloyd and Jahera (1995 cited on holder 1998) reason that those larger firms have easier access to capital markets which are more mature hence allowing for higher dividend pay-out ratios and reducing their dependance on internally generated funding.Aneel Kanwer (2002) heedful size with marr ow sale and researcher prevail out that size is positive related to dividend yields. littler company gives begin dividend as compared to larger company.Oskar kowalewki et el (2007) make a research in Poland and they metric size with total assets .they get under ones skin out that size is positively related to dividends because more dividends are paid by companies which are larger in asset and size.. most researcher result happen out size as negative .The result of the research by Hafeez Ahmed et el (2009) on KSE (non financial firms) is resembling to this thesis result. they measure size with natural log of total assets This results indicates that the size of the firms have the negative impact on dividend payout policy which shows that the firms prefer to invest in their assets rather than pay dividends to their shareholders ..Samy store Naem et el (2006) make their research on the firms of the Tunisian birth foodstuff and They mensural the size with logarithm of stock ma rket capitalization. They conclude that there is a negative relationship between size and dividend, but the negative relationship disappeared when set firms are removed.Since the result of the researcher Fama and french (2000 and 2001) , Lloyd and