Topic Impact of dividend policy on market value of listed firms on the Hochiminh stock exchange in the period 2016 2020 ACKNOWLEDGEMENT First, I would like to express my best appreciation to my parent[.]
Topic: Impact of dividend policy on market value of listed firms on the Hochiminh stock exchange in the period 2016-2020 ACKNOWLEDGEMENT First, I would like to express my best appreciation to my parents and my family for their supports on spirit and material as well as advice and motivation from relatives, friends and colleagues Second, I am deeply thankful to my teachers for supporting me to overcome many challenges throughout this research Third, I definitely acknowledge to all Lecturers as well as administrative board from …… University with the initial lectures Finally, I would like to show my recognition to all tourist participated in the survey This thesis would be never completed without them …………………… …………………… ABSTRACT Dividend policy of a joint stock company determines the after-tax profit paid to shareholders and the retained profit for reinvestment Dividend policy along with investment and financing policies are one of three strategic financial policies that have a decisive influence on the value of the business as well as the existence and development of the company The importance of dividend policy has attracted the attention of economists, it is not accidental that the world has formed the theory of dividend policy The debates on worldwide dividend policy are still ongoing This shows the richness and complexity of the dividend policy theory However, these theories have laid the foundation and suggestive for the construction of dividend policies in the practice of joint stock companies in countries around the world Currently, the main dividend policies in practice commonly applied by joint stock companies in other countries are: dividend stabilization policy, dividend surplus policy, fixed payout ratio policy, policy of paying small dividends during the year and paying additional dividends at the end of the year Along with the development of the economy, joint stock companies in other countries increasingly find solutions to complete dividend policy towards the Balance current dividends to shareholders and future growth of the company to maximize company value ABBREVIATION LIST OF FIGURES AND TABLES Table 3.3: Variable summary and sign expectation Table 4.1.1: Number of listed companies by year Table 4.1.2: Listing scale as at 31/12/2020 Table 4.1.3: Descriptive statistics of indicators related to research samples (2016-2020) Table 4.2.1: Correlation matrix between the dependent variable and the independent variable Table 4.2.2: Evaluate the suitability of the model Table 4.2.3: The results table of regression weights CHAPTER INTRODUCTION 1.1 Reasons for choosing topic In recent years, the decline in economic growth due to the impact of the global economic crisis has made Vietnam's stock market more volatile; especially stock prices have erratic changes Stock price is an issue that many investors and society are very concerned about, is the most important issue for businesses To add value to the business, ensuring the business operates at a loss-free and highly profitable business, managers must make important long-term business and financial decisions with the goal of maximizing enterprise value Therefore, the improvement of corporate value through the most influential factor, the dividend policy, is of great significance to companies listed on the stock market of Vietnam Dividend policy determines the distribution of a company's after-tax profit, what percentage will be retained for reinvestment, and what percentage is used to pay shareholders in the form of dividends (Nguyen Minh Kieu, 2009) No matter how dividends are paid, it will reduce the company's retained earnings If a company's retained earnings are reinvested promising a future stream of income for shareholders, dividends are the steady stream of income that shareholders receive as a reward for the outcome your investment The decision to pay dividend affects the capital structure of the business, and the information contained in the dividend payment, dividend rate (Dividend Yield), dividend payout rate (Dividend Payout) and how Dividend payment method affects stock price fluctuations of listed companies, directly affects the reputation of the company In recent years, dividend income has begun to be of interest to investors in the Vietnamese stock market; However, most companies are not properly aware of the importance of dividend policy, not have clear, long-term directions for profit distribution policy The delay in paying dividends and debt dividends occurs in many companies Investors, especially individual investors, are always passive in stock price fluctuations, making it difficult to set up investment plans in banking and banking in order to achieve the set targets Therefore, the researcher chose the topic: "The impact of dividend policy on market value of listed firms on the Hochiminh stock exchange in the period 2016-2020" 1.2 Research objectives Objective of research is the dividend policy on market value of listed firms on the Hochiminh stock exchange 1.3 Research subject and scope This research is carried with the expectation to find answers for three main questions listed herein below: - How does dividend policy effect on market value of listed firms on the Hochiminh stock exchange? - What are impacts of companies listed on the HCMC Stock Exchange by dividend policy? Research scope is as below: - Space scope: Using a data set including 133 companies listed on the City Stock Exchange In Ho Chi Minh City (HOSE) from 2016 to 2020 - Time scope: from 2016 to 2020 1.4 Research Methodology This study examines the relationship between the dividend policy and the market value of companies listed on the Vietnamese Stock Exchange through either a cash dividend or a stock dividend The thesis uses a combination of qualitative methods, quantitative methods and survey methods to clarify the research problems posed in the thesis: Qualitative research method: The thesis uses a combination of research methods such as interpretation, inductive, statistical analysis, comparison, comparison, synthesis, to consider, analyze and evaluate about dividend policy of companies listed on the stock market exchange Hochiminh In addition, qualitative research is used to select variables in the research model of factors affecting the dividend policy of firms and the impact of dividend policy on firm value Quantitative research method: The thesis uses SPSS software for table data (Pannel Data), uses regression models to identify factors affecting dividend policy and the impact of policies dividends to corporate value of companies listed on the Hochiminh stock exchange 1.5 Significance of the study Based on the representation theory of Jensen and Meckling (1976) and the theory of free cash flow by Jensen (1986), the authors argued that under underdeveloped financial market conditions as in Vietnam, payments Dividends can deplete businesses of cash and lead to the risk of lacking the ability to invest in profitable projects or having to raise capital from the market at high costs This cost can neutralize the benefits of paying dividends mentioned by financial theories and prevent dividend policy from having an impact on firm value in Vietnam Using a data set including 133 companies listed on the City Stock Exchange In Ho Chi Minh City (HOSE) from 2016 to 2020, the data analysis shows that there seems to be no relationship between dividend policy and listed firm value in Vietnam This research contributes to the research treasure trove of the impact of dividend payment policy on firm value in Vietnam in two main points Firstly, this is the first study on this topic in Vietnam using System-GMM estimation method with dynamic model, with the advantage of being able to solve endogenous problems and produce a consistent estimate and more effective than other estimation methods, to study the above mentioned relationship Second, this study is also the first to use the representative theory of Jensen and Meckling (1976) and the free cash flow theory of Jensen (1986) to explain the empirical results observed at Vietnamese market 1.6 Research structure Chapter 1: INTRODUCTION Chapter 2: LITERATURE REVIEW Chapter 3: METHODOLOGY Chapter 4: RESEARCH RESULTS Chapter 5: CONCLUSION The main content of this study will be presented in the following order Chapter will summarize some key theories and evidence on the relationship between public payment policy and corporate value in the world as well as in Vietnam and from that point to the research hypotheses Chapter will present the research variables, data collection methods, and data processing methods Chapter presents and discusses the results of data analysis Finally, the researcher summarized the results of the study, pointed out some shortcomings of the research, and gave some suggestions on ways to expand the research in the future 10