The Relationship between Earnings Management, Return on Equity and Size with Dividend Policy

Dividend policyis one of the most important and extensive issues in the extent of financial management. Actually, designing an optimum dividend policy for maximizing the company's interests is one of the main duties of financial managers, while the investors are interested in companies with stable earnings.So, the managers often manage earnings to signal the investors indicating the stability of earnings and therefore, it causes to adjust the dividend policy. This paper investigates the relationship between earnings management, return on equity, and size with dividend policy of listed companies on Tehran Stock Exchange. So, the data of 63 companies during 1378-1388 has been used. In the present paper, paid dividend has been used as a criteria of dividend policy and also, Modified Kasznik Model has been used for measurement of earnings management. The results indicate significant positive relationships between all three independent variables and dividend policy as the dependent variable.