Effects of Dividend Payout Ratio on the Value of Firms Listed at the Nairobi Securities Exchange, Kenya
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Date
2022Author
Kyallo, Adelaide N
Type
ThesisLanguage
enMetadata
Show full item recordAbstract
Dividend payout effect on firm value has been an area of great controversy in finance and
there has not yet come a unified conclusion concerning it. There have been different
theories that have been developed on dividend policy and also many studies have been
conducted on the same topic and still there has not come up with a unified solution on the
topic thus my study to establish whether dividend payout ratio has an effect on firm value
for companies listed on NSE. The research employed descriptive survey thus giving
description on existing phenomena without changes. The study population was 56
companies listed in the Nairobi Securities Exchange for the period 2014 to 2020.The data
collected included dividend per share, earnings per share, current liabilities, current assets,
net profit/loss, total revenue, total assets, market value of equity and book value of equity.
The independent variable was dividend payout ratio, the control variables were
profitability, liquidity, and company size and firm value was the dependent variable. The
data was organized and summarized using Microsoft excel and then exported to STATA
version 12 for further analysis.The correlation analysis concluded that liquidity had a weak
positive significant relationship with the firm's profitability (R= 0.155). The firm's size had
moderate positive significance with the profitability of the firm (R=0.405).Firm value had
a weak positive significant relationship with the profitability of the firms (R=0.133).
However, liquidity had a weak negative significant relationship with firm size (R=-0.325).
Finally, the firm value had a weak positive influence on firm size (R=-1.91). Panel
regression analysis concluded that dividends are not significantly affected by the firm value
(Beta=170.4, P>0.05). However, firm value was significantly affected by profitability
positively and firm size negatively (Beta = 2309.62 and Beta = -12708.52, respectively).
Publisher
University of Nairobi
Rights
Attribution-NonCommercial-NoDerivs 3.0 United StatesUsage Rights
http://creativecommons.org/licenses/by-nc-nd/3.0/us/Collections
- School of Business [1311]
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