Residual Dividend Policy: The Case of Bangladesh

Mohammad Nayeem Abdullah, Kamruddin Parvez and Rahat Bari Tooheen

The study explores the preference for Residual Dividend Policy among companies in a developing country setting. This study examines the data for 59 companies listed on the Chittagong Stock Exchange. The companies were selected using the Selective Index Method. The study period was from 2002 to 2013. A mix of statistical techniques including the t-test has been applied to examine the preference for following the Residual Dividend Policy. The results demonstrate that the selected companies generally do not follow the Residual Dividend Policy, and that there is no preference for investment policy over dividend policy.