Impact of Dividend Payout on Firm’s Performance Under Low Growth Opportunities

Abstract

Purpose of the study: The objective of the study was to investigate the relationship of the dividend payout on a firm's performance under low growth opportunities from the manufacturing sector of Pakistan.
 Methodology: A sample of 251 firms out of 378 manufacturing firms listed at the Pakistan Stock Exchange (PSX), have been carefully chosen for the era of ten years from 2006 to 2015. The secondary data was obtained from the firm’s web financials and analysis of financial statements, published by the statistics department of the State Bank of Pakistan. For the persistence of investigation panel data (fixed effect) analyses were employed in this study.
 Main Findings: The fallouts of the analysis revealed that the dividend payout ratio has an insignificant relationship with the firm's performance in the low growth perspectives of the study.
 Applications of this study: The findings of the study are helpful for the financial managers of the firms facing low growth opportunities. Furthermore, the investors in capital markets can use the findings of this while investing.
 The originality of this study: The study focussed on the role of low growth opportunities while studying the nexus of dividend pay-out and the firm’s financial performance which inherits the novelty and originality of the study.

Determinants of Company Value: Empirical Evidence from Consumer Goods Industrial Companies in Indonesia

“…This reinvestment can fuel future growth and enhance the company's long-term prospects, potentially leading to a higher valuation (Agarwal & Chakraverty, 2021;Kirch & Vancin, 2023). In contrast, a higher dividend payout ratio may signal that the company is distributing a larger portion of its earnings to shareholders rather than reinvesting in growth, which could limit future growth potential and result in a lower valuation (Ali, Khurshid, & Chaudhary, 2021). The dividend payout ratio can influence investor expectations regarding a company's growth prospects.…”