average a positive relationship between cash flow and

average adjusted dividend payout
is found to be 22.5, 24.9, 25.2 percentage for small, mid & large cap
sectors respectively.

       The cash flow which is taken as a
logarithm of operating activities has a mean of 4.64, 5.26, and 6.52 for small,
mid & large cap sectors respectively. The mean tax paid by small, mid &
large cap sectors are 29.2, 23.8 & 24.7 percentage respectively. The
average growth in sales for small, mid & large cap sectors are 9.1, 0.2
& 14.9 percentage respectively. The mean value of Debt to Equity for small,
mid& large cap are 0.64, 0.56 & 0.34 respectively.

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Profitability

    There is a significant
positive relationship between Profitability and both standard & adjusted
dividend payout. Dividends payout of Small & midcap sectors has a strong
relationship with profitability whereas large cap sectors show slightly less
significant than the two. This shows that large cap sectors being a value based
stocks need to give less dividends in profit to the shareholders to maintain
their reputation.

 

Cash Flow

     There is no significant
relationship between cash flow and dividends payout found in all three
sectors.Amidu and Abor 6 found a positive relationship between cash flow and
dividends payout in the sectors of Ghana. We found only 0.03, 0.02, 0.02
negative relationship with standard payouts and 0.03, 0.01, 0.008 negative
relationship with adjusted payouts which is very negligible.

 

Tax

     There is a positive relationship between tax and dividends paid for
midcap & large cap sectors. Midcap shows a strong correlation of 0.76 and
0.29 for standard & adjusted payout of dividends respectively. Large cap
shows a slightly less correlation of 0.116 and 0.217 for standard &
adjusted payout of dividends respectively. The relationship of tax and
dividends for small cap sector is found to be negative. Small

cap sectors are subjected to some kind of tax exemptions which make the
investors interested in those sectors, if there is tax increase then dividends
payout will decrease, as their profit margin is low.

 

Sales Growth

     There is a significant negative relationship between sales growth and
both Standard & adjusted payout of dividends for small, mid & large cap
sectors respectively. This shows that if the industries decided to plan for
future sales growth then the dividends distributed by them will decrease
significantly.

 

Debt to Equity

   There is no significant relationship found between debt to equity and
Dividend payouts for small, mid & large cap sectors respectively. This
shows that decision taken to pay dividends will not be affected by the
proportion of borrowings companies have with respect to equity.