Abstract:
Dividend distribution decision is one of the key areas of decision making, it follows up
with the questions as of “Are we going to declare dividends”, if so “how much to
declare”. These questions should be addressed by the finance manager so that it
would not affect any interested stakeholder party adversely. This research is
conducted to identify what are the key determinants of dividend payments of
manufacturing companies in Sri Lanka. Various researches have being conducted in
the similar scope including researches in south Asian region, yet within the Sri Lankan
stock market the above said scope has not being addressed. I have made an attempt
to cover this gap through this research. The research is conducted on fifteen selected
manufacturing companies that often pays dividends which are listed in Colombo stock
exchange. I have selected five independent variables supported by previously done
researches. Namely - profitability, firm size, liquidity, leverage and growth. These
variables are observed to its performance with dividend pay-out ratio, which is my
dependent variable. I was able to conclude that there is a significant effect of the
profitability determinant when paying dividends in manufacturing companies in Sri
Lanka.
