Determinants of Dividends of Islamic Financial Institutions Operating in Bangladesh

The dividend payout policy is one of the most debated issues in corporate finance and some academics have called the company’s dividend payout policy an unsolved puzzle. Even though an extensive amount of research regarding dividends has been conducted, there is no uniform answer to the question: what are the determinants of the companies’ dividend payout ratios? The purpose of the paper is to investigate the relationship between the dividend payout rate and method and the companies' selected variables which can influence the dividend policy. The study mainly focuses on stocks of IFIs (Islamic Financial Institutions) of Bangladesh that are listed on Dhaka Stock Exchange (DSE). The study follows a quantitative research method with a deductive approach in order to determine whether there is a relationship between the companies selected independent variables and the dividend payout rate and method by using different statistical instruments. The paper mainly tries to examine the influence of the independent factors such as size of the firm, profitability, lagged dividend, age of firm and leverage over the dividend policy of Islamic financial institutions.