| dc.description.abstract | Medium enterprises experience poor growth because of a number of limitations arising
from poor capital structure, poor liquidity (cash flow) management, undefined ownership
structure, poor profitability and constrained communication and less competent staff and
management among others. This state of affairs influences the dividend policy of the
enterprises which in turn influence the overall growth of the medium enterprises.
Therefore this study seeks to investigate the relationship between determinants of
dividend policy and the growth of Medium enterprises in Kenya by answering the
following research question: how does capital leverage, liquidity and ownership affect
growth of medium enterprises in Kenya? The study used cross-sectional descriptive
survey because of the large number of respondents that were involved. The target
population was 311 drawn from medium enterprises located in Nairobi Central Business
District (NCBD). The study used stratified random sampling and involved taking 20% of
the target population giving a respondent base of sixty two (62) respondents. Data for the
study was collected using the questionnaires and analyzed using descriptive and
regression statistics with the aid of Statistical Package for Social Sciences (SPSS 21.0).
Findings of the study indicated that capital structure, financial liquidity and ownership
structure affect growth of medium enterprises in Kenya The results of the study also
showed that medium enterprise with higher short term and long term liabilities pay lower
dividends and inhibit the firm ability to attract external funds, that cash liquidity plays an
important role in deciding the amount to be paid out and retained and that enterprises
that have higher financial liquidity possess the capacity to pay higher dividends and that
percentage of shares held by various shareholders influence dividend payout and that the
total numbers of shares in the enterprise influence dividend payout and growth. The study
recommends that enterprises need to avoid high leverage ratios which may results in high
transaction costs resulting in a weakened position to pay higher dividends; for Small and
Medium Enterprises (SME’S) to encourage institutions to invest in their enterprises as
they are able to invest huge amount of resources at their disposal and for medium
enterprises to maintain liquidity up to certain level in order to provide financial flexibility
and protection against uncertainty. | en_US |
