Does Dividend Policy Follow the Capital Structure Theory?

Decisions concerning the most optimal choice of financing sources and dividend policy are some of the most difficult financial decisions. This article presents the results of research concerning relationships between two capital structure theories (hierarchy theory and substitution theory) and dividend payment policies in Polish stock companies of the agricultural and foodstuff sector (2001–2006). The research hypothesis was verified positively; company management limits dividend payment according to the hierarchy theory and prefers internal sources of financing economic activities. In order to verify the hypothesis, the methods of descriptive analysis, financial analysis and descriptive statistics were applied, together with a fixed effects model.