Authors: Budier Samson Oyay Awin1 and Grace Akinyi Musa2
1Department of Commerce, KCA University,
PO BOX 52428-00200, Nairobi, Kenya
Author Email: oyayawin@gmail.com
2 Department of Commerce, Technical University of Kenya,
P.O. Box 52428 – 00200. Nairobi- Kenya
Abstract: Companies that are well-established and generate consistent profits often choose to pay dividends as a way to attract and retain investors. It is expected that dividend payments should provide a steady income stream for investors and especially to individuals seeking regular returns on their investments. It is against this background that this study sought to determine the effect of dividend payout determinants on share price of commercial banks listed at the Nairobi Security Exchange in Kenya. The following specific objectives guided the study: to examine the profitability effect on market share price, to analyze the leverage effect on market share price, and to determine the liquidity effect on market share price. The descriptive research design was the preferred method to undertake research. The target population of the study consisted of twelve commercial banks listed at the NSE in Kenya. The study used secondary source of data that included audited financial statements and reports of twelve listed commercial banks in Kenya for a period of ten years from 2010-2019. The study adopted a Random Effects regression model to test association of the study variables. The findings of the study suggest that profitability and liquidity significantly and positively affect stock prices, while leverage displayed a negative and significant correlation with share price. The study recommends that policymakers in the financial sector integrate indicators like profitability, liquidity, and leverage into their strategic decision-making processes. Incorporating these indicators can enhance the comprehension of financial dynamics within NSE-listed firms and similar entities.
Keywords: Dividend payout, share price, determinants of dividend payout, listed commercial banks, Kenyan banking sector, stock market performance, corporate finance, dividend policy, earnings per share, return on equity, market valuation, capital structure, profitability and share price, banking sector investment, financial performance.
This work is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.
Suggested Citation
Budier, S. O. and Akinyi, G. M. (2025). Effect of Dividend Pay-Out Determinants on Share Price of Listed Commercial Banks in Kenya. Journal of Management and Business Administration, 5, 1-17. Available online at https://writersbureau.net/journals/jmba/effect-of-dividend-pay-out-determinants-on-share-price-of-listed-commercial-banks-in-kenya.pdf
