Paying dividends by Kenyan companies

The Nairobi Stock Exchange (NSE) has, as of 2007, 50 companies listed. In general, the NSE does not seem to be a major factor in the economy of the country. In this study we examined the factors that might have motivated the managers of NSE listed companies to pay dividends. This was done through multiple regression analysis of dividends paid as well as by a survey of company mangers. Dividends are strongly related to net income and to liquidity and they are negatively related to the existence of investment opportunities. These findings are in accord with received finance theory, but they have not previously been examined in the Kenyan context.