The Effects of Dividend Policy on Firm Value for Commercial Banks in Kenya

Abstract

This Study sought to investigate the effect of dividend policy on firm value for commercial banks in Kenya. This is because firm dividend policy for a long time has been an unresolved issue eliciting a lot of attention in the corporate financial publications and although there are numerous findings on the subject; it is still an unresolved issueIt. The study was also necessitated by the research gaps in the theories of dividends and empirical findings on dividends and firm value among commercial banks in Kenya. The research study used an explanatory research design to find the influence of dividend policy on the value of a firm for quoted commercial banks in Kenya. It used quantitative methods in applying regression and correlation analysis on the secondary data of all listed commercial banks operating in Kenya. The result found out that there is a strong positive correlation between dividend payout and firm value among commercial banks in Kenya. Hence listed commercial banks in Kenya can increase their value by increasing Dividend payouts