| dc.description.abstract | Explaining factors that influence dividend payout has been one of the most difficult
challenges facing financial economists. Various have been conducted to determine
factors that influence dividend payout and concluded that profitability, liquidity, size and
earned to contributed equity mix positively influence dividend payout. The study sought
to understand and test the relationship between dividend payout of firms listed at the
Nairobi Securities Exchange and macroeconomic variables that included; inflation,
exchange rates, money supply, interest rates. The objective of this study was to identify
the effects of these macroeconomic variables and their influence the dividend payout and
to estimate relationship between them. Annual data for the period 2002 to 2012 were
used. The study used secondary data of dividend payout and macroeconomic variables
from the NSE and Central bank of Kenya on dividend payout rates, inflation rates,
interest rates, exchange rates and money supply. The data was analyzed using a
regression on the dividend paid out as the dependent variable against independent
variables which were inflation rates, interest rates, exchange rates and money supply. The
study has established that dividend payout has a significant relationship with the selected
macro economic variables.
The study concluded that macro economic variables are very significant in determination
of dividend payout by firms listed at the Nairobi securities Exchange Inflation rates have
a significant positive relationship with dividend payout interest rates had very little
impact on the dividend payout while exchange rates had a negative effect on the dividend
payouts. Money supply had a positive effect on the dividend payouts although relatively
mild. The study further recommends that policy makers should review the impact of
macroeconomic variables on the NSE development. It further recommended that surveys
be conducted to establish if investors make investment decision based on dividend
payout. | en |
