Dividend Policy Case Study Of Private Insurances In Ethiopia
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Date
2004-06
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A.A.U
Abstract
The objective of this study is first, to explain how different dividend policies are
practiced by insurance companies, second what factors are influential to determine the
amount of dividend payment, and third how the aforementioned policies and factors
affect the price of the share, if any. A case of descriptive research method has been
employed on four private insurance companies namely, Nile Insurance Company, Awash
Insurance Company, Africa Insurance Company and Global Insurance Company from the
year 1999 to 2003. Insurances have used any arbitrary percentage of paid up capital as a
dividend policy which is different from the common dividend policies. This arbitrary
percentage as a dividend policy is not influential to estimate the amount of dividend
payments in the future because of no consistency. Legal restrictions, liquidity position,
net annual profit, shareholders preferences, growth prospects and taxes are factors which
are commonly used to determine the amount of dividend payments. The paper concludes
that all insuranc.es ยท hav~ not prac~iced relevant divided policy though the above factors
have c:lused partly to increase and partly to decrease to determine the amount of dividend
paym ~nts . . Finally, regardless of any decision in this ~espect, the price of the share
remains the same.
Description
In Partial Fulfillment Of The Requirements For Master Of Business Administration
Keywords
Private Insurances In Ethiopia