Impact of Financial Leverage on Dividend Policy of Pakistani Sugar Industries

ABSTRACT

The study aims to analyze the impact of financial leverage on dividend policy of the listed sugar companies on Karachi Stock Exchange. Dividend paid is the foundation of satisfaction toward investors moreover means to increase their confidence on management. The sugar industry in Pakistan is the second largest agriculture-based industry after textile. Dividend Yield, Debt Ratio and Earnings per share are the independent variables for the study, where Dividend per share is the dependent variable. This study uses data from 2011 to 2016, collected from annual reports of companies listed in Karachi Stock Exchange. Moreover, Multiple regression is used to determine the impact. The findings suggest that Only debt ratios has a negative impact whereas Dividend Yield and Change in earnings have a positive impact on Dividend per share.

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