Dividend Strategy Independent of Profit for the Last Financial Year. An Example of the Żywiec Group S.A.

Abstract

More and more companies listed on the Warsaw Stock Exchange, as well as developed on capital markets, pay dividends, which amounts to a small extent depend on the profit for the last financial year. To this end, the companies form dividend reserve funds (DRF), which allow them to freer dividend policy. Special attention deserves strategy applied in recent years by the Żywiec Group S.A., which each year a portion of the net profit spends on DRF and at the same time, the dividend is paid with the rest of the net profit for the last financial year and the DRF which was created in the previous year. In the article detailed analysis of this strategy was carried out by showing its impact on independent payments from profit for the last year and by introducing the concept of profit for distribution, which realigns the dividend payout ratio. The hypothesis were verified using Lintner’s partial adjustment models.