Dividend policy and value creation: a study in the brazilian market

Purpose: The objective of the study was to test the relationship between the dividend policy, represented by the payout, dividend yield and dividend payable indicators, and the creation or destruction of shareholder value, represented in this case by the Economic Value Added indicator (EVA). Methodology: This is a theoretical-empirical research, in which it was sought through the collection of information, calculation of variables and econometric tests to reach the proposed objective. The sample consisted of 223 public companies listed on BM&FBovespa. Data were collected from these companies in the period from 1/1/1998 to 12/31/2016, which were analyzed using Stata software using panel data. Results: In general, the results showed that companies that retain a greater share of the profit create more value for the shareholders, since they minimize the cost in relation to the search for other external sources of financing. They also showed that most of the analyzed companies were not efficient in creating value in the analyzed period, thus revalidating the hypotheses discussed in previous studies. Contributions of the Study: The work is relevant, as it relates one of the most important decisions in the business context, which is the distribution of dividends, with one of the most widespread value creation verification metrics, EVA. In addition, it contributes to the deepening of studies on dividend policy and EVA, which, even separately, are an important topic for corporate finance. Finally, the study allowed to verify the creation or destruction of value during a long period of time: from 1998 to 2016.