CHAPTER FIVE
CONCLUSION, RECOMMENDATION AND SUMMARY
5.1 Introduction
This chapter consists of conclusions, recommendation and summary of the chapter.

5.1 Conclusion
In this project work, the researcher has attempted to establish the factors that influence dividend payout for firms listed on the London Stock Exchange and 32 firms were randomly selected covering a period of nine years (2004 – 2009). In other to reach a better understanding of the study, relevant literature reviews and some empirical research studies on dividend policy were critically examined. Six explanatory variables were chosen to be the predictor of dividend payout, which are liquidity, leverage, profitability, firm size, growth opportunities and cash flow. However, this study has confirmed that profitability and liquidity are important determinants of dividend policy in a UK firm.

5.2 Recommendation Based on the findings from the analysis, the following recommendations are made for firms:
(i) Profitability in the firm must always be maintained. This is because a profitable business implies that cash would be available to distribute to the shareholders. The level of profitability must always be in focus for the firm; if it is to attain any considerable improvement in its dividend policy.
(ii) The firm’s liquidity must be sustained over time. This implies that the firm’s policy must strive to maintain a relatively high ratio of current assets to current liability. This ensures a sustainable higher dividend payment policy for the firm.
(iii) The firm should always consider its capital structure if it is to maintain improved dividend policy over time. A high level of liabilities does not go well with dividend payment. The liability structure of the firm must be minimal.
(v) To the investors, a big firm in terms of asset would not ensure high dividend payment. The investors must consider ratios such as that of profitability before investing if their goal is to obtain higher dividends
(vi) The investors do not have to consider growth opportunities of firms before they invest in it. This is because the growth and investment opportunities aspired by a firm actually has a negative impact on dividend because an aspiring firm would often stake a large portion of its earnings for expansion. However, the effect is not significant enough to reduce dividend payment policy according to our study.
(v) Finally, other future researchers can focus on more companies listed in the London Stock Exchange and more explanatory variables such as tax, firm ownership can be added to the model to make it better at explaining dividend payout. Other methods besides multiple linear regressions can also be used to examine the relationship with divided policy.

5.3 Summary In this study we investigated the main determinants of dividend policy for a firm using a cross section of UK firms for the period 2004 to 2009. The analysis began with an evaluation of literature that related to the study and certain factors were highlighted as the major determinants of the dividend payout policy. Based on this review, a multiple regression model was specified to capture these factors. The following are the highlight of the findings in the study.
(i) That dividend is an important variable for firms. From the descriptive analysis it was found that firms paid out about 30 percent of their earnings in dividend
(ii) That liquidity is an important determinant of dividend payment. The result showed that a good liquidity position increases firm ability to pay dividend. Indeed, firms with stable cash flow are able to pay dividend more easily than firm with unstable cash flows
(iii) That profitability is an important determinant of a firm’s dividend policy. It was found that profitability caused a firm’s dividend payment to change. A highly profitable firm pays dividend better than a firm with low profitability.
(iv) That the other factors of leverage, size and opportunity for growth do not affect a firm’s dividend policy in any significant manner. This result have been confirmed by other empirical studies