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The Payout Decision-Making Process of Brazilian Listed Companies: A CFO Survey

Author

Listed:
  • Roberto Frota Decourt

    (Unisinos - Universidade do vale do Rio dos Sinos)

  • Jairo Laser Procianoy

    (UFRGS - Universidade Federal do Rio Grande do Sul)

Abstract

The purpose of this paper is to present the results of a survey with Brazilian listed companies CFOs` trying to identify how these companies determine and manage their payout policy. It was identified that the final decision about dividends is taken by the board of directors, taking into consideration a management proposal sent to them before. Main factors analyzed are net profit and cash generation during immediate previous period. The managers mainly consider interest on own capital (JSCP) and dividends as instruments for payout policy. They believe that share repurchase is advantageous to shareholders; however, it is viewed more as an investment decision by the company than a dividend policy. The interest on own capital is broadly used because it provides a fiscal benefit to the company. It seems that management compensation policy affects dividends payout. This suggests an agency conflict between managers and shareholders.

Suggested Citation

  • Roberto Frota Decourt & Jairo Laser Procianoy, 2012. "The Payout Decision-Making Process of Brazilian Listed Companies: A CFO Survey," Brazilian Review of Finance, Brazilian Society of Finance, vol. 10(4), pages 461-498.
    • Handle: RePEc:brf:journl:v:10:y:2012:i:4:p:461-498
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    More about this item

    Keywords

    Payout; Dividend policy; Survey;
    All these keywords.

    JEL classification:

    • G35 - Financial Economics - - Corporate Finance and Governance - - - Payout Policy

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