DETERMINANTS OF DIVIDEND PAYOUT IN EMERGING STOCK MARKETS AT DAR ES SALAAM STOCK EXCHANGE, TANZANIA MAINLAND

Abstract

The study purpose was to examine the factors that influence the dividend pay-out policy of twelve (12) listed companies at DSE using panel data analysis for the period of eleven years (2010 to 2020) and purposive sampling strategy was used. The data used was extracted from secondary statistics in annual financial reports of the companies within the period of study. The data was analysed using Stata version 15, Ordinary Least Squares (OLS) regression model was used to determine the coefficients. The study found that growth opportunities variable had negative influence on dividend pay-out ratio while liquidity and industry had positive influence on dividend policy while profitability proxied by return on equity had positive relation with dividend pay-out ratio but statistically insignificant. The study concludes that dividend policy is vital to enable shareholders to maximize their wealth and managers should avoid paying dividend beyond their net incomes which is not sustainable in long-term. The study recommends that the management team needs to strive for higher liquidity, higher asset growth and ultimately maintain high liquid firms to cater for shareholder’s goal of wealth maximization in the form of higher dividend pay-outs