Propensity to pay dividends in Brasil

Abstract

The information is vital for ensuring harmony among the constituent parts of the capital market. The value of the information, the knowledge’s base, is recognized and appreciated by all in the contemporary world. While each individual has his own interpretation, access to it is imperative for a more efficient and fair functioning of markets. One way to providing information to the market is through the policy of dividends. According to the argument of the theory of signaling, the policy of dividend form a channel of communication, where administrators will provide signals that could mitigate the asymmetry of information. This paper notes that dynamic by testing the importance of dividends communication. Based on the methodology created by Fama and French, were showed that the evolution of dividends in Brazil is opposed to the U.S. and England. Because in the brazilian’s market is not noted a decline as in other countries.