Ect of Blockholder Ownership on Dividend Policies: an Empirical Analysis of Firms Listed on Nse

Abstract

The research was necessitated by the need to understand the effect of Block holders on dividend policy of firms. The study attempted to answer the following questions: Does the ownership structure have an effect on the dividend policies of quoted companies? Are the Kenyan financial decision makers sensitive to the influence of blockholder owners while making dividend decisions? Does the fear of expropriation by minority investors lead to payment of higher dividends by quoted firms? The study used descriptive secondary data from Nairobi Stock Exchange data base and the individual financial statements of the firms. The dividends payments, earnings per share and ownership structures were used. The dividend declared and the dividend payout ratios were calculated and analyzed using regression and correlation analysis. The results indicate that firms with block holders tend to give higher dividends compared to firms with higher state ownership, foreign ownership and individual ownership. In conclusion there is a positive relationship between the block holders and dividend policy since firms with higher block holder ownership have been observed to have higher dividend payout ratios.