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Journal of Finance & Economics Research - Volume 6, Issue 2 2021
By Muhammad Askar
10.20547/jfer2106204
Keywords: Debt Ratio; debt to equity ratio; institutional ownership; managerial ownership; dividend policy; dividend payout ratio; fixed-effect model
This work investigates the impact of capital structure (CS) and corporate governance (CG) on dividend policy. The sample selected for this study includes all firms in the cement sector of the Pakistan stock exchange. The CS and CG are measured using the debt to equity ratio (DER) and managerial and institutional ownership mechanisms. The dividend policy (DP) is measure using the dividend payout ratio. The fixed effect model of regression is used for estimation and correlation matrix. The data normality, autocorrelation and multicollinearity are also used as a tool of analysis. The results show no outliers problem in the data set and have the pair of variables firmly. We also demonstrate that CS and CG has a significant impact on dividend policy. It is concluded that CS and managerial ownership positively impacted dividend policy, while there is an insignificant impact on institutional ownership.