An Empirical Investigation of the Impact of Dividend Policy on Performance of Quoted Companies in a Developing Economy
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Date
2017-11-22
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Singaporean Journal of Business, Economics and management studies (SJBEM)
Abstract
This study empirically investigate the impact of dividend policy on performance of quoted companies in a developing economy. The objective of the study was to empirically test some ratio variables likely to affect dividend policy on a multivariate methodology. The sample size of this study was twenty quoted firms in a developing nation actively operating within 2005 to 2016 in the stockmarket. It was deduced that there is a significant positive impact of dividend pay-out ratio (DPS) on return on asset of .176. One percent increase in dividend payout ratio will lead to a corresponding increase on the average of 0.176 in return of asset (ROA). From our analysis, we found out that the coefficient of determination (R2) captured a significant portion of the models applied in the study but model two become stronger. We also found out that there is a positive relationship between ROE and DPS of .540 and the slope of the regression line is .129. This indicate that one percent increase of DPS will lead to a corresponding increase on ROE. The study there concluded that profit after tax should be considered sensitive in relation to dividend payment.
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Keywords
Dividend policy, Performance, Return on assets, Regression
Citation
7