ANALYSIS OF DIVIDEND PAYMENT EFFECT ON EARNINGS PER SHARE: AN APPLICATION IN THE BIST CEMENT INDUSTRY

Abstract

Dividend policies have an important scope of study in finance literature. However it have not been provided consensus among theoretical approachs that dividend policies try to explain effect on company value. There are different opinions and theories about whether the payment of dividends affect the company's profitability. One of these approaches is that the dividend payments have a signal effect on their future profits of the company. With this study has been tested whether dividend payments has an effect on future company’s profitability and hence on earnings per share. Between 2005 and 2015 annual financial datas of 15 companies who traded their stocks on the Istanbul Stock Exchange and operating in the cement sector, have been used in the study. Panel data set where located in the rates used to measure the company's profitability, has been created. Dividend payments are as independent (explanatory) variable and profitability ratios are as dependent variables were included in the panel data regression models. The relationship between each dependent variable and independent variable was investigated. At the results of the analyzes conducted using panel data analysis methods, the dividend payments were found to be in effect to earnings per share positively