The Effect of Cash Holding Level and Credit Risk of Bank on Dividend Policy of the Banks Listed in Tehran Stock Exchange

Abstract

The present study aims to examine the effect of cash holding level and credit risk of the bank on dividend policy of the banks listed in Tehran Stock Exchange during 2011 and 2015. In this regard, the cash holding level and credit risk are the independent variables, and the dividend policy is the dependent variable. The size, financial leverage, systemic risk and growth opportunities of the bank are also considered as control variables. The statistical population of research includes 17 banks. The research method is a descriptive-correlational with an applied approach. The data collection method was library study in the theoretical part, and financial statements documentation was used for hypotheses test. In general, the statistical method used in this study is correlation and multiple regression. According to the first hypothesis results, the level of cash holdings has a significant inverse effect on dividend policy of banks. Also, based on the second hypothesis, credit risk has an inverse and significant effect on dividend policy of banks. The results of the control variables showed that the variables of financial leverage and systematic risk have an inverse and significant effect on dividend politics, while the bank size and growth opportunities have a direct and significant effect on dividend politics