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Zero leverage and dividend policy

Author

Listed:
  • Li, Michelle
  • Roberts, Helen

Abstract

This study investigates zero leverage firms and their choice to pay dividends among New Zealand (NZ) listed firms for the period 2007 – 2021. Overall our findings indicate that after allowing for financial constraints limiting firm debt capacity and firm preference for financial flexibility, firm priority to pay dividends affects firm debt levels. Additional analysis shows that dividend paying firms with growth opportunities will increase short-term debt to maintain dividend payments.

Suggested Citation

  • Li, Michelle & Roberts, Helen, 2023. "Zero leverage and dividend policy," Finance Research Letters, Elsevier, vol. 58(PB).
    • Handle: RePEc:eee:finlet:v:58:y:2023:i:pb:s1544612323008024
    DOI: 10.1016/j.frl.2023.104430
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    More about this item

    Keywords

    Zero leverage; Capital structure; Dividend policy;
    All these keywords.

    JEL classification:

    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • G35 - Financial Economics - - Corporate Finance and Governance - - - Payout Policy

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