Determinants of payout policy and investment attractiveness of companies listed on the Warsaw stock exchange

Abstract

Research background:Making decisions concerning the payout policy depends on many diversified neoclassical and behavioral determinants. Although these factors are well-described in the literature, there is still a research gap concerning the lack of a comprehen-sive impact model of payout policy determinants on the investment attractiveness of shares. Purpose of the article: The aim of this paper is to present the diverse nature of the relation-ship between different forms of cash transfer to the shareholders and investments attractiveness of public companies in the context of various determinants of payout policy. The possibility of achieving this objective was conditioned by the empirical verification of research hypothesis stating that the diversify of payout forms is accompanied by the different determinants of payout policy that condition an effective investment of stock investors’ capital. Methods: The empirical research was conducted among the electromechanical companies listed on the Warsaw Stock Exchange in the years 2006-2015. The data for analysis were obtained from Notoria Service database and Stock Exchange Yearbooks. The calculations were carried out using the methodology of taxonomic measure of investment attractiveness, as well as dividend premium and share repurchase premium. Findings & Value added: The final conclusion of our research is that the companies conducting the payout policy in different forms of cash transfer differ in terms of many charac-teristics, such as: financial standing, market value, ownership structure, company’s size and age. Moreover, their investment attractiveness differs according to regularity of payment, stock exchange situation and shareholders’ preferences. The value added of this paper is a new approach to the evaluation of capital investment with a special emphasis on the determinants of payout policy.