Retained earnings as a source of financing for the payment of dividends

Abstract

It is generally believed that the amount of dividends paid by a  company determines the net profit for the last financial year. In fact, the dividend must not be in direct relation with the net profit, as a  source of funding may also be retained earnings. The purpose of this article is to examine to what extent the companies
listed on the Warsaw Stock advantage of this opportunity. In 2010-2012 it made the 39 companies and the share of retained earnings in the amount paid by the company’s dividend was 43%. One of the reasons for this is the economic slowdown, accompanied by limited access to attractive investment projects.