University of Isfahan Financial Accounting Research 2322-3405 6 3 2014 11 22 Main Dividend Theories Test Stressing the Role of Institutional Shareholders in Tehran Stock Exchange Main Dividend Theories Test Stressing the Role of Institutional Shareholders in Tehran Stock Exchange 1 20 17023 FA Hosein Etemadi Assocate Professor in Accounting, Tarbiat Modares University, Tehran, Iran Alia Sghar Anvary Rostamy Professor in Accounting, Tarbiat Modares University, Tehran, Iran V Ahmadian Phd Condidate of Accounting, Tarbiat Modares University, Tehran, Iran Journal Article 2016 06 14 The purpose of this study is to test the main theories of dividend policy by relying on the relationship between dividend policy information asymmetry variables, external financial dependence and life cycle of the company. Second aim of this study is to examine the influence of institutional shareholders on this relationship. The research sample consists of 91 companies listed in Tehran Stock Exchange during the period 2005 to 2012. To test the hypotheses, Tobit and logit regression models are used. Overall, the results are consistent with the hierarchical, signaling, static balance and agency theories, and there is a negative association between dividend policy and external fiancing. The findings suggest that the dividend policy of firms with high institutional ownership compared to firms with low institutional ownership, are less sensitive to information asymmetry and depend on external financing. The results also reject the life cycle theory in Tehran Stock Exchange, stating that there is no significant relationship between dividend policy and corporate life.   The purpose of this study is to test the main theories of dividend policy by relying on the relationship between dividend policy information asymmetry variables, external financial dependence and life cycle of the company. Second aim of this study is to examine the influence of institutional shareholders on this relationship. The research sample consists of 91 companies listed in Tehran Stock Exchange during the period 2005 to 2012. To test the hypotheses, Tobit and logit regression models are used. Overall, the results are consistent with the hierarchical, signaling, static balance and agency theories, and there is a negative association between dividend policy and external fiancing. The findings suggest that the dividend policy of firms with high institutional ownership compared to firms with low institutional ownership, are less sensitive to information asymmetry and depend on external financing. The results also reject the life cycle theory in Tehran Stock Exchange, stating that there is no significant relationship between dividend policy and corporate life.   https://far.ui.ac.ir/article_17023_2fa856e47e66c5404730fcbb37dab094.pdf