The empirical relationship between dividend and investment decisions of firms quoted at the Nairobi stock exchange
Abstract
This study sought to investigate whether or not there is a relationship between dividend
and investment decisions. The major source of data was financial records of publicly
quoted companies obtained from the Nairobi Stock Exchange (NSE). Data from the
various companies was gathered and analysed using the regression techniques provided
by the excel package. The dividend and investment models were regressed and the
resultant equations obtained. Each variable present in the model was tested for its
significance in the model using the t-statistics. The whole model was then checked to see
how much the variables present explain the variations as opposed to other variables not
present in the model. The whole model was tested using the adjusted R2. The standard
errors for the two models for each company were compared and the results obtained
indicate that investments affect dividend decisions.
The dividend model was the most favorable in the companies under investigation. The
investment variable in the different companies was significant in the dividend model
whereas the dividend variable in the investment model was also significant in the
investment model.
In conclusion it was obtained that a relationship between dividend and investment
Citation
A Management Research Project Report Submitted in Partial Fulfillment for the Requirements of the Degree of Masters of Business Administration (MBA), School Of Business, University Of NairobiPublisher
Business Administration