Propensity to Pay Dividends: Evidence from US Banking Sector

Jamal Al-Khasawneh, Mohammad Shariff, Khalid Al-Zubi


Using Fama and French’s (2001) methodology, this paper attempts to shed light on dividend policy and propensity to pay cash dividends implemented by U.S. commercial banks as a possible alternative choice for dividend-seeking investors. The results show that most banks pay dividends at increasing rates, more banks have started paying dividends, while a few have stopped paying dividends. The findings also indicate that the main explanatory variables in predicting cash dividends are: the total assets, return on equity, and equity to liability ratio.

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International Journal of Economics and Finance  ISSN  1916-971X (Print) ISSN  1916-9728 (Online)

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