Impact of Dividend Payments on Share Values in Companies Listed in the Nairobi Securities Exchange in Kenya

The purpose of the study was to analyze the relationship between the dividend payments of the companies listed in the Nairobi securities exchange and their share values. The data utilized related to 29 companies listed in the Nairobi securities exchange for a period of ten (10) years (2003-2012). The study laid emphasis on the companies that participated in the transactions at the stock exchange; and paid dividends regularly as compared to their respective share values. The design of the study was descriptive research design. The data was obtained from the Nairobi securities exchange by desk research. The data was captured for the dividend payments per share made and the share values for the period under study. Data was entered and analysed using Statistical Package for Social Scientists (SPSS) version twenty two (22). The data captured included the dividend per share and the share prices for the period under investigation. The researcher then analyzed the data using linear regression, ANOVA and correlation coefficients. Tests were conducted to understand if there was a relationship in the share values of companies. Data analysis used linear regression analysis. The findings of the analysis indicate that the companies that regularly pay dividends had a positive impact on share values. In addition, there was a positive statistically significant relationship between dividend per share and share values. The results support the dividend relevance theory developed by Myron Gordon and John Lintner (GL). Keywords: Dividend payments, Share values, dividend per share, Nairobi securities exchange, Keny