Volume 6, Issue 2, June 2014, Pages 216–221
Muhammad Asad1 and Saddia Yousaf2
1 Lecturer Mirpur University of Science and Technology AJK, Pakistan
2 Research Officer Ministry of Education, Trainings and Standards in Higher Education Islamabad, Pakistan
Original language: English
Copyright © 2014 ISSR Journals. This is an open access article distributed under the Creative Commons Attribution License, which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.
This paper examines the impact of leverage on dividend payment pattern of Pakistani manufacturing firms. 44 companies from five different sectors having regular dividend payment history are included in sample. The annual data for these companies from 2006 to 2011 is used in the study. Simple OLS technique for analysis is used to derive the results of the study. The findings show that leverage has significant negative impact on dividend payment pattern of sampled firms. Dummies variable used to identify the sector specific impact of leverage on dividend payment reveal that affect of leverage on dividend distribution in sugar and textile industry behave differently as compare to other sectors. The results of study help the corporate management to better decide the level of leverage and dividend policy by highlighting the interaction between leverage and dividend payment pattern. That in turn ensures the equity market stability.
Author Keywords: Leverage, Dividend, Profitability, Size.
Muhammad Asad1 and Saddia Yousaf2
1 Lecturer Mirpur University of Science and Technology AJK, Pakistan
2 Research Officer Ministry of Education, Trainings and Standards in Higher Education Islamabad, Pakistan
Original language: English
Copyright © 2014 ISSR Journals. This is an open access article distributed under the Creative Commons Attribution License, which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.
Abstract
This paper examines the impact of leverage on dividend payment pattern of Pakistani manufacturing firms. 44 companies from five different sectors having regular dividend payment history are included in sample. The annual data for these companies from 2006 to 2011 is used in the study. Simple OLS technique for analysis is used to derive the results of the study. The findings show that leverage has significant negative impact on dividend payment pattern of sampled firms. Dummies variable used to identify the sector specific impact of leverage on dividend payment reveal that affect of leverage on dividend distribution in sugar and textile industry behave differently as compare to other sectors. The results of study help the corporate management to better decide the level of leverage and dividend policy by highlighting the interaction between leverage and dividend payment pattern. That in turn ensures the equity market stability.
Author Keywords: Leverage, Dividend, Profitability, Size.
How to Cite this Article
Muhammad Asad and Saddia Yousaf, “Impact of Leverage on Dividend Payment Behavior of Pakistani Manufacturing Firms,” International Journal of Innovation and Applied Studies, vol. 6, no. 2, pp. 216–221, June 2014.
