Bank Dividend Policy as a Signal of Bank Quality

Authors

  • Robert Boldin Finance and Legal Studies Department, Indiana University of Pennsylvania, Indiana, PA 157051087
  • Keith Leggett Department of Economics, Davis & Elkins College, Elkins, WV 2624 l-3996.

DOI:

https://doi.org/10.1016/1057-0810(95)90013-6

Abstract

This article examines whether the dividendpolicy of bank holding companies is used as a signal of their quality. The study found evidence to support the dividend signaling argument-that is, that there is a positive relationship between bank dividendsper share and bank quality rating. Aaiiitionally, an inverse relationship between the dividend payout ratio and bank quality was found. Therefore, both aspects of a bank holding company’s dividendpolicy yields information about the quality of a fmancial institution.

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Published

1995-06-30

How to Cite

Boldin, R., & Leggett , K. (1995). Bank Dividend Policy as a Signal of Bank Quality. Financial Services Review: The Journal of Individual Financial Management, 4(1), 1–8. https://doi.org/10.1016/1057-0810(95)90013-6

Issue

Vol. 4 No. 1 (1995): Financial Services Review

Section

New Original Submission

License

Copyright (c) 1995 JAI Press Inc.

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