The effect of the firm’s age and financial leverage on its dividend policy – Evidence from kuwait stock exchange market (KSE)

Abstract

Identifying the major determinants of companies’ dividend policy has been the pith of various researchers and industry practitioners as well. In this research, the effect of the firms’ financial leverage and age on their dividend policy has been explored. Two hypotheses were formulated, where the first focused on examining the effect of the firms’ financial leverage and the second concentrated on investigating the effect of the firms’ age on their dividend policy. The sample assimilated in this study comprises of 38 Kuwait Stock Exchange listed companies from different industries. The period of investigation was five years, from 2009 to 2013. The hypotheses were tested using ordinary least square and fixed-effect panel regression. The results signify a negative relationship between the firm’s financial leverage and dividend payout ratio. Moreover, the results indicate a negative relationship between the firm’s age and dividend payout ratio.