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Auto Mobile Sector: Correlation Analyses

This document analyzes the correlation between various determinants of dividend policy for auto companies from 2012 to 2017 using 58 observations. It finds a strong positive correlation between dividend, earnings, and operating cash flow, but insignificant correlations with debt, size, and largest shareholders. There is a moderate positive correlation with growth and investment opportunities. It specifically examines the relationship between dividend per share and dividend policy, finding a negative but insignificant relationship, thus failing to reject the null hypothesis of no relationship.

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27 views2 pages

Auto Mobile Sector: Correlation Analyses

This document analyzes the correlation between various determinants of dividend policy for auto companies from 2012 to 2017 using 58 observations. It finds a strong positive correlation between dividend, earnings, and operating cash flow, but insignificant correlations with debt, size, and largest shareholders. There is a moderate positive correlation with growth and investment opportunities. It specifically examines the relationship between dividend per share and dividend policy, finding a negative but insignificant relationship, thus failing to reject the null hypothesis of no relationship.

Uploaded by

Alpha
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd

Auto Mobile sector

Correlation Analyses

Covariance Analysis: Ordinary

Sample: 2012 2017

Included observations: 58

Correlation
Determinants of
Probability Dividend Policy 

Dividend 1.000000

----- 

Earning 0.897403
0.0000

Cash flow operating  0.524637


0.0000

Debt  -0.072278

0.5898

size 0.043286

0.7470

Growth  0.422267

0.0010

Investment
opportunity  0.377959

0.0034

Largest Shareholders  -0.126143

0.3454
 Dividend per share and Dividend policy:

Hypotheses:

 Null hypotheses: There is no relationship between Dividend per share and Dividend
policy
 Alternate hypothesis: There is a relationship between. Dividend per share and Dividend
policy

Interpretation:

Hence, there is a negative and insignificant relationship between Dividend per share and
Dividend policy because the correlated value is -151 which shoes the negative relation and
significance level is 0.425 which is greater than 0.005 that shows insignificant relation. So, we
accept null hypotheses and reject alternate hypotheses.

 Earning per share and Dividend policy

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