The Relationship between Dividend Payout and Firm Financial Performance: A Study of Botswana Listed Companies
DOI:
https://doi.org/10.14738/abr.44.2163Abstract
The association between dividend payout and the financial performance of a firm has been a subject of debate among scholars for decades. This debate has been particularly fueled and prolonged by the ambiguity of the results of prior research on the association between the two variables and the broadness in perspective of the extant literature on the subject matter. This research seeks to further explore this subject matter specifically by testing the relationship between dividend payout and firm financial performance within the context of Botswana listed firms. The model used in the paper incorporates net profits, systematic risk and total assets as the main variables. The regression analysis results found a positive correlation between dividend payout and firm profitability. The association of the variables of systematic risk and total assets to dividend payout was not supported statistically. To the extent that the paper found a statistically significant relationship between dividend payout and NOPAT, the relevance of dividend policy was affirmed, a matter that has implications on companies’ financial and operational strategies.
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