The Relationship between Dividend Payout And Firm Financial Performance

Abstract

This article examines the association between the dividend payout ratio and financial performance of the firm. Basically the dividend payout is the ratio of dividend payment to shareholder by the organization from its net earning while the financial performance include the net profit after tax, return on equity, return on asset etc. To locate the association between dividend payout and FP, the five year data (2008 to 2012) of 20 Pakistani companies listed in Karachi stock exchange has been collected. The correlation analysis and liner regression analysis method is use to find out the relationship between them. The result of this study shows that there dividend payout positively influenced on financial performance of firm.