Factors Affecting Dividend Policy: Empirical Study from Pharmaceutical’s Companies in Pakistan (PSX)

Abstract

The existing study intends to measure those factors that affect dividend policy by considering pharmasuitacal’s companies registered on PSX from 2013 to 2017. Population based on all sectors of Pakistan Stock Exchange (PSX) in which pharmaceutical’s companies taken as a sample by using census sampling technique because all companies of pharmaceutical sector were considered. Panel VAR model, fixed effect model (FAM) and also used a regression model to define the influence of IV on DV. The results revealed that has a significant effect of managerial ownership, debt policy, ROA, firm size and free cash flow on dividend policy. The findings of this study demonstrated that the company’s future performance has more concern for the betterment investors than current revenue. There should be active focus on the future aspects in order to improve firm performance.