The Investigation of Relationship between Cash Dividends and Investment Considering the Effect of Company's Life Cycle Modifier in Listed Companies in Tehran Stock Exchange

Decision making with regard to the dividend is an important topic because this is influenced by various factors such as economic factors. One of the economic factorsis the company's life cycle. According to the life-cycle theory, companies in different stages of the life cycle show specific behaviors financially and economically. It means that institutions and companies follow specific policy according to stage of their economic life. Thus, the present study investigates the relationship between cash dividends paid and investment at the company's life cycle in listed companies in Tehran Stock Exchange. Accordingly, the research hypotheses were tested using the mix data regression in Tehran stock exchange with regard to the related data from 2003 to 2012. Among all attended companies, 680 companies were selected as the statistical sample. The findings show that there is a significant direct relationship between the cash dividend and investment,but this relationship differs in various stages of the company's life cycle.