The Dividend Payment Policies of Selected Listed Companies in Botswana

Abstract

Dividend policy is an important and fascinating subject in corporate finance. Many researchers have provided insights into the issue of dividend policy and why it is an important area in corporate finance. However, the issue of whether there is an optimal dividend policy is important because of the effect of its information on outsiders regarding future prospects of the firm, its impact on the firm's capital structure, investment opportunities and stock price.


This is an investigative study of the dividend policies of four listed companies in Botswana. The focus of this study is to examines the constancy or otherwise of dividends per share relative to the firms' earning. The study also examines the theoretical basis for the selection reflected by the price/earning ratio.


The findings of the research reveal that the selected companies had dividend policies that they adhered to and that they believed would maximize their shareholders' weather the firm use a blend of the residual dividend policy and the constant and steadily increasing dividend policy.


African Journal of Finance and Management Vol.10(1) 2001: 53-68