Abstract

The central motivation of this paper is to fill a gap in the literature by exploring the communal determinants of dividend policy and capital structure. Estimations were made using data of 272 non-financial firms listed on KSE during 2005-2014. Results indicate that profitability, size, and total debt ratio are positively while tangibility and liquidity are negatively linked to dividend ratio. In contrast, size is positively while profitability is inversely linked to both proxies of capital structure i.e. total debt ratio and long-term debt ratio. Dividend ratio is positively linked to total debt ratio. Tangibility is positively linked to long-term debt ratio. Alternatively, tangibility is negatively linked to total debt ratio. Liquidity is inversely related to both proxies of capital structure in OLS method with an exception that it is positively linked to long-term debt ratio in the fixed effects method. Finally, growth and earnings volatility have no significant impact on dividend policy and capital structure.