Corporate Tax Operating Cash flow and Sales Growth and their Impact on Dividend Payout Ratio in Oil and Gas Companies Listed in Karachi Stock Exchange (KSE)

Abstract

Purpose: The purpose of this study is to comprehend the dynamics of dividend payout in Pakistan’s oil and gas sector. This study is an attempt to differentiate that what are factors force firms to distribute dividends instead of enhancing retained earnings. To draw the required results 13 listed oil and gas companies have been incorporated in this study and their 5 years’ data has been studied.
 Design/Methodology/Approach: This study is quantitative and secondary data has been used to extract results. The sources of the data are financial statements of the companies under study. Fixed and random effects of regression were used for data analysis.
 Findings: Based on this study, it can be concluded that the independent variables selected in this model have the power to explain the dependent variable by 45%, which means the results generated through this study can be given importance accordingly in the oil and gas sector of Pakistan. The explanatory variables were identified from the prior literature and then their impact on dividend payout ratio was studied.
 Implications/Originality/Value: It is evident from the results of the study that management can take necessary steps to formulate a mutually beneficial dividend policy that can enhance the strength and effectiveness of these explanatory variables to enforce a dividend policy that fulfils the expectations of both the investors and the company. The investors can also evaluate different factors that might have an impact on dividend distribution and they can also get the ability to determine dividend payout ratio which made the basis for decision making for investment in the given sector.