The determinants of dividend policy in Ghana: evidence from the Ghana stock exchange.
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Date
2016-08
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Publisher
KNUST
Abstract
Dividend payment is one of the main factors that drive shareholders to invest capital in
business. This study seeks to find the determinants of dividend policy of listed
companies on Ghana. To achieve this objective Panel data covering 2013/2014
financial year for 20 listed companies on Ghana Stock Exchange were sampled. The
study adopted a quantitative method and used mainly secondary data. The study
analyses a range of determinants of dividend payout: firm leverage (LEV), Liquidity
(LIQ), firm size (SIZE) profitability (PROF), Taxation (TAX), Growth and Tangibility
(TANG).
Ordinary Least Square Regression analysis is carried out to assess the main effect of
the determinants of the dividend payout. Firm leverage (LEV), Liquidity (LIQ), firm
size (SIZE) profitability (PROF), Taxation (TAX), Growth and Tangibility (TANG)
can predict about 40% of dividend payout. The regression results also reveal that, firm’s
growth, firm’s profitability, liquidity and corporate tax associate positively with
dividend payment. The descriptive statistics indicates that, on average of about 75% of
the listed firms on GSE have a policy to pay dividend with average dividend pay ratio
been 28%.
The study provides evidence that profitability, liquidity and growth are the most
important factors that affect dividend policy of companies in Ghana. So, companies
should give consideration to profitability, liquidity and growth when they set dividend
policy
Description
A Thesis Submitted To The Department Of Accounting And Finance In Partial Fulfilment Of The Requirements For The Degree Of Master In Business Administration (Accounting)