The characteristics of Bonus-Issuing firms in Kenya: An empirical study

Abstract

Studies such as that conducted by Grinblatt et al.., ( 1984), have proven that stock dividends are more than mere cosmetic changes. They appeal to investor because of their psychological value, tax benefits and because they signal prospects of higher profits in the future. This study, by refining the Lev and Lakonishok's (1987) study, empirically investigates the characteristics of the stock dividend firms quoted at the Nairobi stock Exchange. It also documents a model for predicting the likelihood of a firm to issue stock dividend .