Effects of Capital Structure on Dividends Pay-out Ratio Amongst Non-financial Firms Listed at the Nairobi Securities Exchange,Kenya
Abstract
The study analyzed the relevance of a firm’s capital structure to the dividend payout ratio for
publicly traded firms providing non-financial services and products on the NSE in Kenya.
Capital structure decisions have a vital role to play in the success of companies, in both their
activities and in dividend decisions. The report used a descriptive design and used data obtained
from secondary tools in the research. The reference population was a total of 40 publicly-listed
non-financial companies by the end of 2019. Data were obtained from secondary sources on the
Nairobi Stock Exchange and annual reports were released on corporate websites for a period of
10 years from 2010 to 2019. The survey was conducted to assess whether the dividend payment
ratio, as described in the dividend policy adopted by firms operating in the non-financial firms
on the NSE list, is significantly affected by the structure of the capital of the company. The
capital structure consisted of three factors, retained profits, long-term debt, and equity capital.
Control variables were studied to ensure a minimal bias on the variables studied, including
market capitalization, price-to-book ratio, share price, and asset return. The thesis used the
STATA statistical program for data analysis, including a description of data, correlation, and
regression analysis. The results of the analysis validated previous research on dividend policy
and capital structure, which backed the claim that there was no substantial connection between
the dividend payout ratio and the company's capital structure. The findings of the analysis are
shown in the tables. The study suggests that companies implement sustainable dividend policies,
balancing dividend payments with other competing interests that can take over the capital of
firms
Publisher
University of Nairobi
Rights
Attribution-NonCommercial-NoDerivs 3.0 United StatesUsage Rights
http://creativecommons.org/licenses/by-nc-nd/3.0/us/Collections
- School of Business [1411]
The following license files are associated with this item: