Australian Corporate Dividend Policy: Empirical Evidence

This paper provides Australian evidence on the validity of the lintner (1956) dividend model. This model suggests corporate dividends are a function of current and past earnings. Regression tests are carried out. In these tests the basic Lintner model performs better than some other dividend models examined. In addition, the ability of the model to predict dividend changes is examined and compared to forecasts of various naive models. The forecasting test results generally indicate that a simple no-change model predicts as well as more complex regression models.