The Impact of Liquidity, Financial Leverage, and Profitability on Dividend

The dividend payout ratio is one of the important and frequently looked at indicators for investors looking to allocate capital to specific companies and build investment portfolios. This study aims to examine the impact of liquidity, financial leverage, and profitability on dividends. A total population of 42 publicly listed companies listed in Bahrain Bourse for two years of 2021 and 2022 have been selected. The result of the study indicates that liquidity and profitability would significantly positively affect the dividend payout ratio. However, it expects that leverage would significantly negatively affect the dividend payout ratio. The study is the first study in Bahrain that examines the influence of liquidity, financial leverage, and profitability on dividends. Hence, it adds value to the literature knowledge in terms of dividends that the shareholders are interested in. Results will help the policymakers and shareholders to monitor and control the investment.