International Journal of Managment, IT and Engineering
  • Year: 2014
  • Volume: 4
  • Issue: 2

Impact of capital structure and dividend policy on firm's performance and stock return

  • Author:
  • Abdul Mannan, Bilal Aziz, Muhammad Sajid1,, Shoaib Masood Khan
  • Total Page Count: 16
  • Page Number: 509 to 524

*Research Scholar, Government College University, Faisalabad, Pakistan

**Assist. Professor, Banking & Finance, Government College University, Faisalabad, Pakistan

***Lecturer, Department of Banking & Finance, Government College University, Faisalabad, Pakistan

1Corresponding Author

JEL Classification: G35, G32, L25, C31

Abstract

The paper investigated the impact of capital structure and dividend policy on firm performance and stock return. The study used the panel data of 24 companies listed in KSE 100 index of Pakistan over the period of 2007–2013. Results of Hausman, (1978) test suggest Random Effect Model. Firm Performance is the dependent variable and capital structure is the independent variable. Moreover, two control variables are also used (i.e. Growth and Size). The result shows that capital structure portion (STD and LTD) has negative impact on performance of the firm. Furthermore, dividend policy (Pay) also has negative relationship with performance of the firm.

Keywords

Capital structure, Dividend Policy, Firm Performance, Stock Returns, Pakistan