Capital Structure on Dividend Policy: Is There Any Relationship?
Dividend pay-out policies often emanate from complex financial decisions and corporate managers do not consider dividend policies in isolation. However, some studies have indicated that capital structure significantly affects dividend pay-out and should be managed properly as it accounts for variat...
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| Format: | Article |
| Language: | English |
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EconJournals
2023-05-01
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| Series: | International Journal of Economics and Financial Issues |
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| Online Access: | https://econjournals.com/index.php/ijefi/article/view/14344 |
| Summary: | Dividend pay-out policies often emanate from complex financial decisions and corporate managers do not consider dividend policies in isolation. However, some studies have indicated that capital structure significantly affects dividend pay-out and should be managed properly as it accounts for variations in dividends. The aim of this study was to investigate the relationship between capital structure and dividend pay-out. This study made use of a Kolmogorov-Smirnov and a Chi-square test. These tests are more reliable in investigating the variations and dependency between variables and are a leap from the models used in the prior literature. Using the R-square values of six published articles, the results revealed that capital structure cannot be used to explain variations in dividend pay-out as suggested by some authors. The implications of this study are that academic journals should scrutinise journal manuscripts where there are suggestions that there is a relationship between capital structure and dividend policy
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| ISSN: | 2146-4138 |