THE RELATIONSHIP BETWEEN INFORMATION ASYMMETRY AND DIVIDEND POLICY

In this study the relationship between information asymmetry and dividend policy are discussed. Information asymmetry is defined as an inequality of information between managers and other stakeholders of a company. The dividend policy is the process in which managers are paid profits, and in this situation earning management could play an important role. In this article to prove this hypothesis, the member companies of Tehran Stock Exchange during the years 1386 to 1390 are discussed. To measure information asymmetry we use the bid price difference of buying and selling shares model. Amplitude of bid price difference between the buying and selling of shares represents the gap between the bid price and the offer to buy shares of the stock sale. In this study, dividend policy is dividend to the four components of profitability, market capitalization , asset growth and tobin Q that is divided into components associated with each of these four hypotheses are studied in the context of information asymmetry. Statistical methods used in this study are descriptive statistics, regression and correlation. The correlation coefficient and the significance level of the hypothesis test, witnessed significant relationship among all components of dividend policy with information asymmetry. Then using stepwise regression analysis, general hypothesis of this study that was the effect of dividend policy on information asymmetry was also proved and a model based on regression coefficients were estimated for information asymmetry. Results show if dividends increase between shareholders, we will see a reduction in information asymmetry between managers and stakeholders.

THE RELATIONSHIP BETWEEN INFORMATION ASYMMETRY AND DIVIDEND POLICY Keywords:

Information asymmetry , Dividend policy , Earnings management