PROLOGUE

Reasons to choose a topic

Dividend policy is a matter of great concern in the field of corporate finance,

which is controversial in terms of research. There have been many research
proposals on the factors that impact dividend policies and dividend policies that
affect companies. Understanding this policy will be an important knowledge for
me on the way to pursue finance. Therefore, I would like to choose the topic
'Dividend Policy' with the enterprise selected for analysis is FPT Joint Stock
Company to fulfill the relevant requirements of the topic.
CHAPTER 1. DIVIDEND POLICY OF FPT JOINT STOCK COMPANY

1. Characteristics of FPT's current dividend policy

FPT's high dividend policy helps the company operate more efficiently, reduces the
risk of undercapitalization and attracts investors. FPT company usually pays dividends
in 2 to 3 installments in 1 year. This helps the Company ensure its liquidity by not
being subject to payment pressures, i.e. not having to spend a large amount of money
at a certain time.

Using a combination of two forms of dividend payment is cash dividend payment and
stock dividend payment. When using a combination of both forms of dividend
payment, it will create benefits for both businesses and employees.

- For FPT Company itself, the company can use retained profits to reinvest, grow
capital, and improve business efficiency.
- For the fans, it pleases different groups. Because the east of the Joint Stock
Company is usually divided into two groups. One group is large shareholders,
who are interested in the growth of the Company, concerned about whether
their capital is profitable and used effectively. They prefer to receive stock
instead of a small cash dividend. Another group of colleges, which are small,
individual employees who care about the benefits in the short term. They prefer
to receive cash rather than stocks, because for them it is their annual source of
income. In addition, FPT's dividend policy needs to improve the issues of cash
dividend payment, the profit ratio for the company's dividend payment and the
risk of diluted shares due to dividend payments in the form of shares.
2. Overview of the company's dividend payment activities from 2020 – 2022
 Pay cash and stock dividends

The Ex - The
Date of
Year Dividend record Proportion Detail
execution
Date date
Pay dividend in
the 1st phase of
17/08/2020 18/08/2020 01/09/2020 10% 2020 in cash,
1,000
VND/SHARE
2020 Pay dividend in
the 2nd phase of
16/06/2021 10%
2020 in cash,
01/06/2021 02/06/2021
VND 1,000/share
Pay dividends in
20:3
shares

Pay dividend in
the 1st phase of
16/08/2021 17/08/2021 01/09/2021 10% 2021 in cash,
1,000
VND/SHARE
Pay dividend in
2021
the 2nd phase of
27/06/2022 10%
2021 in cash,
13/06/2022 14/06/2022 VND 1,000/share
Pay 2021
5:1 dividends in
shares
2022 24/08/2022 25/08/2022 12/09/2022 10% Pay dividend in
 the 1st phase of
2022 in cash,
VND 1,000/share

 1st dividend payment in 2020:

 The Record date: 05/08/2020
 The Ex -Dividend Date: 17/08/2020
 The Record date: 18/08/2020
 Execution rate: 10% on par value (equivalent to VND 1,000 per 1 share).
Duration: 01/09/2020
Date 05/08/2020: price 34,100 VND/share
Date 17/08/2020: price 34,100 VND/share
Date 18/08/2020: price 34,000 VND/share
Date 01/09/2020: price 36,200 VND/share
 2nd dividend payment in 2020:
 The Record date announcement date: 20/05/2021
 The Ex -Dividend Date: 01/06/2021
 The Record date: 02/06/2021
 Execution rate:
10% on par value (equivalent to VND 1,000 per 1 share).
20:3 for the issuance of shares to pay the 2020 dividend (118,367,231
shares).
Duration: 16/06/2021
Date 20/05/2021: price 69,200 VND/share
Date 01/06/2021: price 72,600 VND/share
Date 02/06/2021: price 71,200 VND/share
Date 16/06/2021: price 69,300 VND/share
 1st dividend payment in 2021:
 The Record date notified: 05/08/2021
 The Ex -Dividend Date: 16/08/2021
 The Record date: 17/08/2021
 Execution rate: 10% on par value (equivalent to VND 1,000 per 1 share).
Duration: 01/09/2021
Date 05/08/2021: price 80,500 VND/share
Date 16/08/2021: price 78,800 VND/share
Date 17/08/2021: price 78,200 VND/share
Date 01/09/2021: price 77,000 VND/share
 2nd installment dividend payment in 2021:
 The Record date: 02/06/2022
 The Ex -Dividend Date: 13/06/2022
 The Record date: 14/06/2022
 Execution rate:
10% on par value (equivalent to VND 1,000 per 1 share).
20:3 for issuing shares to pay dividends in 2021 (182,839,182 shares)
Implementation time: 27/06/2022
Date 02/06/2022: price 92,900 VND/share
Date 13/06/2022: price 86,200 VND/share
Date 14/06/2022: price 89,100 VND/share
Date 27/06/2022: price 86,500 VND/share
 1st dividend payment in 2022:
 The Record date: 27/07/2022
 The Ex -Dividend Date: 24/08/2022
 The Record date: 25/08/2022
 Execution rate: 10% on par value (equivalent to VND 1,000 per 1 share).
Implementation time: 12/09/2022
Date 27/07/2022: price 85,200 VND/share
Date 24/08/2022: price 86,200 VND/share
Date 25/08/2022: price 86,300 VND/share
12/09/2022: not updated at the time of implementation of the report
FPT's dividend rate is expected to be 40% for 2022, of which 20% is in cash
and 20% in shares.
Observe:

Based on the data listed above, we can see the change in the price of shares on the ex-
vesting day through each dividend payment of FPT Joint Stock Company from 2020 -
2022. In general, the non-entitled trading day share price of the 1st tranche of 2020, 2
tranches in 2021 and the 1st tranche of 2022 tends to decrease while there is a sharp
increase recorded in the 2nd tranche of 2020. In addition, the non-entitled trading day
share price of the 1st tranche of 2020 decreased the slightest and the 2nd tranche of
2021 decreased the most compared to the previous entitlement trading days.

In conclusion, we can see that the dividend policy has been inversely proportional to
the share price on the non-entitlement date compared to the share price on the
entitlement date of FPT. The reason for the decline in stock prices is to ensure the
principle of fairness for investors. On that day, when buying shares, investors will not
be entitled to shareholder benefits such as receiving dividends, the right to buy
additional shares, participating in the shareholders' meeting, so most of the share price
will be adjusted down corresponding to the rate of dividends paid. In addition, the
decrease in the price of the stock after dividends will also attract the attention of
investors. Many investors could not buy FPT's shares when it was high, now when the
market price falls, investors have the opportunity to buy.
 CHAPTER 2. A SUMMARY OF EMPIRICAL STUDIES EXPLAINS
HOW AND WHY DIVIDEND POLICY AFFECTS THE COMPANY.
1. Overview of studies on the impact of dividend policies on corporate value
Foreign Studies
The dividend policy can be represented by the dividend payout ratio of the
company calculated by taking the dividend per share divided by the income per share.
Studies by Mula Nazar Khan et al. (2016), Hasan et al. (2015), Richard Ndibanla
Onanjiri and Thomas Korankye (2014), Mohammed Amidu (2007) took the dividend
payout ratio to represent dividend policy.
 Dr. Rachid M'rabet Wiame Boujjat (2016) and T. M. Murekefu and O. P.
Ouma (2012) found that dividend policy had a negative impact on a company's
performance, whereas Hasan et al. (2015), Richard Ndibanla Onanjiri and Thomas
Korankye (2014) and Mohammed Amidu (2007) found the opposite impact of dividend
policy on company performance.
Domestic research
 Vu Van La (2013) also studied the dividend policy and enterprise value of
companies listed on the Vietnamese stock market from 2007 to 2012. The study also
outlined the important role and appropriate dividend policy in each period. However,
the article only synthesizes, observes and analyzes based on published data without
making survey questions, measuring the impact of dividend policies on the value of
enterprises.
 Vo Xuan Vinh (2014) studied the effect of dividend policy on stock price
fluctuations. The paper uses a tabular data regression model analysis method with data
from 103 companies listed on the Ho Chi Minh City Stock Exchange from 2008 to
2012.
 2. The research paper "Impact of dividend policy on business value and
some suggestions" by the authors Nguyen Ngoc Huy and Truong Thi My Tram
in 2016
The purpose of the study was to examine the relationship between
dividend policy and corporate value with data of 920 observations of companies listed
on the Ho Chi Minh City Stock Exchange from 2011 to 2015.
The scope of the study was 184 non-financial enterprises listed on the Ho Chi Minh
City Stock Exchange from 2011 to 2015.
The research method of the paper is to use all three models of estimating data
(OLS, FEM, REM) static and dynamic tables, OLS pools to verify the relationship.
There is also the use of quadratic functions for verification to clarify doubts about the
existence of a nonlinear relationship between dividend policy and enterprise value.
In general, the nonlinear relationship between the value of enterprises and the
rate of cash dividends shows that enterprises trade off between the costs and benefits
of paying dividends to maximize the value of the enterprise. Therefore, businesses
will increase this payment to maximize. On the contrary, when the optimal level is
exceeded, the more profits are retained, the lower the enterprise value.
In conclusion, the dividend payout ratio of companies listed on the Ho Chi Minh
City Stock Exchange in the period of 2011-2015 tends to decrease. Companies may
pay dividends in the form of cash or shares or a combination of cash and stock
dividend payments.
 3. Research paper "The effect of dividend policies on stock price fluctuations
of companies listed on the Vietnamese stock market" by Dang Thi Quynh Anh
and Pham Thi Yen Nhi in 2015.
The purpose of the article is to study the relationship between dividend policies
and stock price fluctuations of companies in the Vietnamese market.
The scope of the study was data on 165 companies listed on HOSE and HNX,
paying full dividends for 5 years from 2009 to 2013.
The research method used is a tabular data regression method with a fixed
impact effect (FEM) technique selected after conducting the Hausman test.
The research model 1 used is the model Baskin built in 1989, and model 2 will
be supplemented with two variables of stock dividend yield and dividend growth rate.
However, in Baskin's original model that only mentioned the cash dividend yield,
adding a stock dividend yield variable would assess the effect of paying stock
dividends and paying cash dividends on stock price fluctuations. Dividend growth rate
is also a factor affecting stock price movements, so it is also included in the model.
The result of the study is that dividend policy affects stock price fluctuations, thereby
affecting the value of the enterprise.
 CHAPTER 3: SUMMARY OF EMPIRICAL STUDIES THAT
EXAMINED THE FACTORS INFLUENCING DIVIDEND POLICY.

Lesson 1: Research paper "Factors affecting dividend policies of enterprises

listed on Vietnam stock market" by Dinh Bao Ngoc and Nguyen Chi Cuong in
2014

The purpose of the study is to focus on identifying factors affecting the dividend
policy of enterprises listed on the Stock Exchange of Vietnam (on both HOSE and
HNX). The author uses tabular data based on data from the financial statements of 95
enterprises listed on Vietnam stock market in the period 2008-2013 (554
observations).

The research methodology of the paper is to use the fixed influence model
(FEM) and the stochastic influence model (REM) as follows: The author will first test
Hausman to select the FEM model or the REM model as suitable for sample data
regression, resulting in the FEM model being selected. Finally, to increase the
accuracy and reliability of the regression results, the author continues to perform
Robustness testing for the results of the selected regression model.

The results of the model show the impact of variables on dividend policy as follows:

- Income per share of enterprises has a favorable impact (+) on the dividend
policy of enterprises with a meaningful level of 5%. This shows that the higher the
EPS of the enterprise, the more the dividend payout ratio of the enterprise tends to
increase. Enterprises only really cut dividends if the financial situation faces many
difficulties and the income that the enterprise achieves is in a state of real loss.
- Profitability (ROA) of enterprises has a favorable impact (+) on the dividend
policy of enterprises with a meaningful level of 1%. Research results show that the
more profitable enterprises or the greater the efficiency of production and business
activities, they tend to pay more cash dividends to shareholders.
- The dividend policy in the previous period has a favorable impact (+) on the
dividend policy in the current year of the enterprise with a meaningful level of 1%.
The decline of the cash dividend rate in this year to the previous year is also a
limitation in the planning of corporate dividend policies, because this greatly affects
the reputation, image and value of corporate shares in the market. Therefore, this
year's dividend policy is strictly governed in the direction of the previous year's
dividend policy.
- The macroeconomic growth rate has an inverse impact (-) on the
dividend policy of enterprises with a meaningful level of 1%. In the condition that the
macro economy has good signs, the economy is in a period of high growth, so there
will be many investment opportunities, thereby promising to bring a lot of profits to
businesses in the future. Therefore, businesses will be more considerate in deciding
the dividend payout ratio, which will limit the payment of cash dividends to
shareholders but instead will reinvest most of the after-tax profits that businesses
achieve to seek more attractive growth opportunities in the future.
- Bank interest rates in the market have a favorable impact (+) on the
dividend policy of enterprises with a meaningful level of 1%. In fact, investors always
consider the bank interest rate as a low-risk rate of return, and all returns from other
investment activities are comparable to this rate.
Lesson 2: Research paper 'Research on factors affecting dividend policies of
Vietnamese enterprises' by Author Than Tan Thuan and instructor Th.S Ho
Thuy Tien in 2013

The purpose of the study was to look for evidence of the impact of factors on
dividend policy, including industry factors. The survey results of 192 companies in 6
industries, listed on the stock exchange of Ho Chi Minh City Stock Exchange and
Hanoi Stock Exchange in the period 2008 - 2012.

The paper uses a quantitative research methodology using a multivariate

regression model to estimate the relationship between dividend payout ratios and
factors that are likely to impact dividends. The paper analyzes the relationship
between variables through two models of tobit regression and logit regression. This is
a relatively new approach compared to previous research projects in Vietnam at the
time of the report.

- In addition, the paper also uses descriptive statistical methods and testing
methods in statistics for research.
- Industry pseudo-variables are added to the model to examine the impact of
industry factors on payout dividends.

The author finds a number of factors belonging to the characteristics of the

company that have an impact on the rate of dividend payment. For example, the
higher the share ownership rate of members inside the enterprise, the higher the
dividend payout ratio. In contrast, businesses with high growth opportunities pay low
dividends. In addition, the results show an inverse relationship between the number of
non-executive members on the board and the dividend payout ratio.

The results also show that there is an impact of industry factors on dividend
policy. And only a handful of industries have as much an impact on dividend payouts
as industry and technology. This finding is also not strong enough to confirm that the
industry factor really has an influence on dividend policy. However, this also helps us
see the influence of industry factors to have more appropriate policy development
research directions.
Boujjat, Rachid M’rabet Wiame. 2016. The Relationship Between Dividend Payments
And Firm Performance: A Study Of Listed Companies In Morocco. European
Scientific Journal, edition vol.12, No.4.

Murekefu, t. M., & ouma, o. P. (2012). The relationship between dividend payout and
firm performance: a study of listed companies in kenya. European scientific journal,
esj, 8(9).

Vũ Văn Lá (2013), “Chính sách cổ tức và giá trị DN”, Luận văn thạc sĩ tài chính –
ngân hàng Trường Đại học kinh tế – Đại học Quốc Gia Hà Nội;

Vo Xuan Vinh (2014). Dividend policy and price volatility in Vietnam stock market.
Journal of Economics and Development, 48-55.

Nguyễn Ngọc Huy, Trương Thị Mỹ Trâm (2016). Tác động của chính sách cổ tức đến
giá trị doanh nghiệp và một số gợi ý. Tạp chí Tài chính, 65-67.

Đặng Thị Quỳnh ANH & Phạm Thị Yến Nhi (2015). Ảnh hưởng của chính sách cổ
tức đến biến động giá cổ phiếu các công ty niêm yết trên thị trường chứng khoán Việt
Nam. Tạp chí Nghiên cứu và Trao đổi, 60-65.

Dinh Bao Ngoc and Nguyen Chi Cuong (2014). Các nhân tố ảnh hưởng đến chính
sách cổ tức của các doanh nghiệp niêm yết trên thị trường chứng khoán Việt Nam.
Tạp chí Kinh tế & Phát triển, 290, 42-60.

Than Tan Thuan (2013). Research on factors affecting dividend policy of Vietnamese
enterprises, MA thesis, University of Economics Ho Chi Minh City. Ho Chi Minh.

Mula Nazar Khan, Farooq Ali Khan Sherwani, Afshan, Fahad Islam, Ghulam Kabbir
(2016), Impact of Capital Structure and Dividend Payout Policy on Firm’s Financial
Performance: Evidence from Manufacturing Sector of Pakistan, American Journal of
Business and Society, 2(1), 29-35.

Hasan et al. (2015). Dividend Payout Ratio and Firm’s Profitability. Evidence from
Pakistan. Theoretical Economics Letters, 5(3), 441-445.
Mohammed Amidu. (2007). How does dividend policy affect performance of the firm
on Ghana Stock exchange? Investment Management and Financial
Innovations,4(2),103-112.

Rarchid M’rabet & Wiame Boujjat (2016). The Relationship Between Dividend
Payments And Firm Performance: A Study Of Listed Companies In Morocco,
European Scientific Journal, 12, 469.