An Empirical Investigation of the Relationship Between Dividend Changes and Earnings,cash-flows and Capital Structure for Firms Listed in the Nairobi Stock Exchange

Abstract

Dividend are very important considerations for any individual seriously considering investing in a company .Generally dividends are the payments of all or part fa firms net earnings to the shareholders. On the other band capital gains appear in the form of appreciation of the market value of affirm hare. Dividend policy determine the extent of internal financing by a firm. The finance manager decide whether to release corporate earnings from the control of the enterprise. This study was carried out with the aim of examining the presence and strength of the relationship between dividends changes with variables such as earning cash flow and capital structure leverage) among firms listed in the Nairobi tack Exchange (N E). A ample of 43 Firms was used to bring out the relationship between dividend and certain variables namely earnings cash flows and capital structure or leverage. Spss software was used to analyze data. A regression of dividends against the three variables indicates that earning was the most important variable among the studied variables.