Influence of Dividend Payout on Investment in Shares - A Survey of Retail Investors in Kenya
Joshua Aroni, Prof. G. Namusonge, Dr. Maurice Sakwa

Abstract
The main objective of this study was to examine the effect of dividend payout on investment in shares for Kenyan retail investors, applying the behavioral finance theory. There has been a paradigm shift in thinking from the traditional Efficient Market Hypothesis in trying to analyze the capital markets with the proposition that investor decisions to invest could be impacted on by behavioral factors. Primary data was collected from 311respondents randomly sampled form the population of 836.250 investors participating at the Nairobi Securities Exchange as at March 2013. Data analysis was done applying descriptive andlinear regression statistical data analysis. The results revealed that dividend payout had a significant influence on decisions to invest in shares with p-value .000 (p<0.05). In view of the findings, the researchers recommend that policy makers steadfast to enhance securities market activity should purposely structure strategies aimed to increase profitability and consequently guarantee dividend payout to bolster investor confidence.This will support to stimulate development of the financial markets to mobilize long term capital foreconomic development. The study findings are incongruent to MM the dividend irrelevance theory.

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