Relationship between Debt Affordability Ratios and Stock Dividend

Abstract

The objectives of this research were to study 1) relationship between debt affordability ratios and dividend ratios per share of the companies listed in the MAI Stock Exchange, 2) relationship between debt affordability ratios and dividend ratios per profit of the companies listed in the MAI Stock Exchange, and 3) relationship between debt affordability ratios and dividend yield ratios of the companies listed in the MAI Stock Exchange. Independent variables of debt affordability ratios included current ratios, quick ratios, debt ratios, debt to equity ratios, and interest coverage ratios. Dependent variables of stock dividend ratios included ratios of dividend per share, dividend per profit, and dividend yield. The data used were collected from the annual registration statement (Form 56-1) of all 7 groups of companies listed on the MAI Stock Exchange including agriculture and food industry, consumer products, industrials, property and construction, resources, services, and technology. The researchers collected the data consecutively from 2018 to 2020 in a total of 3 years totaling 140 companies. The statistics used in the research were descriptive statistics: the maximum value, the minimum value, mean, and standard deviation, and multiple regression analysis.

              The research findings were as follows.

1. The study of the debt affordability ratios and the dividend ratios per share of the companies listed in the MAI Stock Exchange showed that the quick ratios, the debt ratios, and the debt-to-equity ratios had relationship with the dividend ratios per share with the statistical significance at the level of .05.
2. The study of the debt affordability ratios and the dividend ratios per profit of the companies listed in the MAI Stock Exchange showed that the debt ratios had relationship with the dividend ratios per profit with the statistical significance at the level of .05.
3. The study of the relationship between the debt affordability ratios and the dividend ratios of the companies listed in the MAI Stock Exchange showed that the interest coverage ratios had relationship with the dividend yield ratios with the statistical significance at the level of .05.