Critical Analysis of the Factors Affecting the Dividend Payout: Evidence from Pakistan
International Journal of Economics, Finance and Management Sciences
Volume 3, Issue 3, June 2015, Pages: 204-212
Received: Mar. 28, 2015; Accepted: Apr. 10, 2015; Published: Apr. 27, 2015
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Saghir Ahmed, Department of Management Sciences, National University of Modern Languages, Islamabad, Pakistan
Hasan Murtaza, Business School, University of Lahore, Islamabad Campus, Pakistan
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The research was conducted to highlight the determinants of dividend payout and to analyse the effect of change in dividends over the future company growth in Pakistan. Firm size, liquidity, profitability, leverage, and earnings per share were used as independent variable while dividend payout ratio was taken as dependent variable. Prolonging this relationship further, dividend payout ratio was taken as independent variable and company growth as dependent variable to examine the impact of dividend payout ratio on future company growth. Descriptive statistics and pooled least square method were used. E-views was used to process the secondary data from 2003-2011 related to 38 selected companies from four different sectors. Results show that there is a significant relationship among liquidity, earning per share, leverage, firm size and dividend payout ratio in all four selected sectors: Oil, Cement, Energy, and Sugar. It is also found that there is significant relationship between dividend payout ratio and future company growth.
Dividend Payout, Pooled Least Square Regression, Pakistan
To cite this article
Saghir Ahmed, Hasan Murtaza, Critical Analysis of the Factors Affecting the Dividend Payout: Evidence from Pakistan, International Journal of Economics, Finance and Management Sciences. Vol. 3, No. 3, 2015, pp. 204-212. doi: 10.11648/j.ijefm.20150303.17
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