| dc.description.abstract | Dividends are very important considerations for any
rational investor. Ultimately, most rational investors
would invest in a company because they expect to receive
dividends. It is this factor which makes a company's
dividend policy be of paramount importance.
However, the dividend policy of a firm is not always
easy to formulate. It is first of all a very complex
division where numerous factors must be weiKhted. The
weight placed on the numerous factors does in turn influence
the practice. The ultimate objective of any dividend
policy pursued by the firm is the maximization of its
shareholders wealth.
This study investigates the dividend practice and
factors weighted by Kenyan publicly quoted firms when
making the dividend devision. The results obtained about
dividend practice and factors weighted are discussed in
this report. Bbth cash and stock dividends were found to
be popular forms of earninbs distribution.
It was also found that most comapnies lack a systematic
dividend decision makinb procedure. As such, most
companies end up considering not more than two (cash and
earnings) factors when deciding how much earnings to
distribute. However, in total, most of the factors which
iv
theory says should be considered were also mentioned here
and there.
The researcher recommends that the dividend decision
be taken more seriuusly (than is being currently done).
Management should try to consider as many factors as
possible so that the firm can at least have a faint hope of
maximizing its value to its shareholders. Ad hoc
dividend decisions should be avoided so as not to lose
shareholders confidence. | en |
