The Relationship between Financial Flexibility and Dividend Payouts: A Case of Listed Firms in Kenya

Abstract

Dividend payouts must be viewed as part of an integrated financial strategy that include a company’s future funding needs and have costs and benefit implications on financial flexibility since they involve amounts and timing of cash flows. The study found out that there exists a relationship between the financial flexibility and dividend policy and that the probability and amount of dividends decrease as the value of financial flexibility increases.

Keywords: Financial flexibility, dividend policy, Nairobi Securities Exchange