The Cost of Debt Capital and Dividend Payouts: Evidence from Thailand
Keywords:
Dividend Policies, Dividend Payouts, Cost of Debt Capital, Borrowing CostAbstract
This study aims to investigate the role of dividends in explaining debt pricing decision making. Using data from Thai listed companies spanning the period 2000 through 2016, results from a panel regression analysis indicate that there is no significant association between the cost of debt capital and dividend payouts. The inferences are unchanged even after using alternative measurements for dividends and excluding global financial crisis periods. This study contributes to the stream of research on dividend payout consequences by documenting that dividends do not provide incrementally useful information when there are a few agency conflicts of interests due to a dominant family-run business environment.
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