engleski

Are Dividends Important for Valuing Croatian Companies?

Dividend policy behaviour of companies operating in emerging markets is significantly different from the widely accepted dividend policy behaviour of companies operating in developed markets. Out from this difference, confirmed with various empirical researches, raises the question of determining optimal dividend policy. Dividend policy and its impacts on the maximization of shareholders wealth are one of the important aspects of financial policy for companies in developed markets. For companies in the Republic of Croatia in period 2000 - 2005, results of this research confirmed the conclusions of Modigliani-Miller dividend irrelevance theory. Even though it relies on perfect market assumptions, which Croatian capital market isn't, arise the conclusion that Croatian shareholders can not increase their wealth by combinig dividend policy factors. That is in direct contradiction with other dividend policy theories, characteristic for developed markets, where dividend policy represent active management variable in achieving company market value maximization.

Dividend policy; emerging markets; company valuation; stock price

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