| dc.description.abstract | Firms engage in three critical decisions namely, financing, investment and dividend.
Financing decisions entails how firms source for funds through debt and equity financing
while investment decisions entail how the sourced funds are invested into profitable projects
for expansions and growth. Dividend decisions entail how generated profits are distributed
among the shareholders. The objective of the study was to establish the effect of debt
financing on dividend policy of firms listed at the Nairobi Securities Exchange between 2009
to 2013.The study employed longitudinal research design that used secondary quantitative
data from financial statements of sampled firms listed at the NSE. The study considered a
population of sixty three quoted firms at the NSE as at 31st December 2013. Purposive
sampling design was used to select the sample size of non financial forty one firms listed at
the NSE from 2009 to 2013. Analyzed data was presented in form of pie charts, graphs and
tables. Descriptive and inferential statistics was applied to assess the relationship between
dividend policy and debt financing of firms listed at the NSE. The study sought to find out
whether there exists a relationship between debt financing and dividend policy for firms
listed at the NSE between 2009 to 2013.The study findings concludes that a negative
relationship does exist. The study supports previous research done by Brealey and Myers
(2000) and Asif, et all. (2011) who concluded that there exists a negative association between
financial leverage and dividend policies employed by firms. The study had the limitations of
use of secondary data with high likelihood of impairment, time constraints and using few
samples from selected listed firms. The study recommends further research on other factors
that affect dividend policy of firms, non listed firms that are the majority and sector specific
segments among others. | en_US |
