Effect of Earning and Cash Flows on Dividends of Listed Companies in Tehran Stock Exchange

ABSTRACT: In this paper we investigate the effect of earning per share (EPS) and cash flow on dividends per share (DPS). The study sample was 81 companies listed In Tehran Stock Exchange from 2006 to 2012. Panel data model was used, and data were analyzed in e-views software. Our results showed that EPS had no significant relationship with DPS, but operating cash flow, cash flow return on investments, income taxes, cash flows from investing and cash flows from financing were effective factors in dividend policy of the listed companies.

KEYWORDS: Cash Flows; Earnings Per Share; Dividend Policy; Investments; Tehran Stock Exchange