DIVIDEND DECISIONS, ECONOMIC GROWTH AND FIRM’S VALUE OF FIRMS LISTED AT NAIROBI SECURITIES EXCHANGE KENYA

Abstract

The declining and highly volatile firm value observed in the NSE over the last decade has raised concern among scholars and financial practitioners. A declining and turbulent firm value implies lost and unstable shareholders wealth which in turn increases risk to the stock holders. It is therefore important to ensure that the firm value is enhanced to ensure growth and stable wealth of the shareholders. The study was carried out to determine the effect of dividend decisions, economic growth and firms’ value of selected firms listed at Nairobi securities exchange Kenya. The target population was the 46 non-financial companies listed in the NSE. A census of all non-financial firms listed in the Nairobi Securities Exchange was done. The study utilized secondary data from financial reports as published in the NSE handbook and Kenya National Bureau of Statistics for the period between 2008 and 2016. Panel regressions analysis and Pearson’s product moment correlation analysis were used for inferential analysis while means and standard deviations were used for purposes of descriptive analysis. Feasible Generalized Least Square (FGLS) regression results indicated that dividend decisions (p=0.012,