Abstract
This paper analyzes the dividend policy of 18 banks listed on the Karachi Stock Exchange
(KSE) during the period 2001-2007. The study outlines the main determinants that may drive
the dividend policy of KSE listed banks. Lintner’s model has been applied in a dynamic
setting. The Lintner model result maintains the listed banks in Pakistan depend on earning
per share and past dividend to decide their dividend payments. However, the results show
that dividend tend to be more to current earning as compared to the dividend trend in the
past. The results indicate that profitable banks have more free cash flow and they pay more
dividends. Moreover, assets growth does not seem to be consistent with the dividend policy.
Financial leverage also has no impact on dividend policy of Pakistani banks.
Intikhab Alam Khan, Dr. Rashid Salaria . (2009) Determinants and Dynamics of Dividend Policy: Evidence from Pakistan’s Banking Sector, Journal of Independent Studies and Research-Management, Social Sciences and Economics, Volume-07, Issue-1.
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