FINANCIAL FACTORS INFLUENCING DIVIDEND POLICY: AN EVIDENCE OF GENERAL INDUSTRIAL SECTOR LISTED IN KSE

Abstract

The aspiration of this research paper is to get the measure of the Financial Factors Influencing on Dividend Policy with respect to General Industrial Sector and to grasp the association ship that impact on dividend payout. Method of sampling is being used in Simple Pooled Regression Model, Fixed Effective Model and Random Effective Model including Hausman Test taking samples of the 9 organizations listed (General Industrial Sector) on the Karachi stock exchange for the periods of 11 years (2014-2022). In Simple Regression Model (OLS) the results showed that financial factors such as (ROA, ROE and CR) has significant influence on dividend payout ratio but the association betwixt dividend payout with all explanatory variables such as (positive with return on assets, firm size and leverage while negative with return on equity, current ratio and earnings per share) and other model has applied such as Fixed Effective Model (FEM) the results showed that (Return on assets and Current ratio has significant influence on dividend payout ratio) along with association betwixt dividend payout with all explanatory variables such as (positive with return on assets and leverage while negative with return on equity, firm size, current ratio and earnings per share) however Random Effective Model (REM) has applied the results has showed that (ROA, ROE and CR) has significant impact on dividend payout ratio and others were insignificant on dividend payout but the association betwixt dividend payout with all explanatory variables such as (positive with return on assets, firm size and leverage while negative with return on equity, current ratio and earnings per share).Hausman Test has applied to evaluate the fitted model that Random Effective Model has fitted model because of P-value.5578 higher than .05 or 5%. This research paper will assist for evaluate of the dividend policy regarding General Industrial Sector which is listed in the Karachi Stock Exchange.