Esther Mutanu Nzioka, Dr. Agnes Njeru, Dr. Kennedy K. Nteere
Abstract: The stock market reacts differently to various factors ranging from economic, political and socio-cultural. The stock prices of quoted companies in Kenya are affected either positively or negatively by a number of factors occurring within or without the economic system. These prompted the researcher to investigate the effect of dividend per share on share prices after the initial public offer (IPO) for quoted companies in Kenya. The study specifically focused on investigating the effect of expected future earnings on share prices after an IPO, investigating the effect of level of growth rate on share prices after an IPO and investigating the effect of earnings news on share prices after an IPO. The study was conducted through a descriptive survey design whereby data was gathered from secondary sources through thorough examination of financial performance records of the quoted companies listed at Nairobi Security exchange. The data was then analyzed and evaluated for usefulness, consistency, credibility and adequacy through content analysis. The findings obtained from the study were presented in form of Tables and graphs. The recommendations were made from the findings. The analysis of the data was done using the SPSS version twenty one and for secondary data questionnaires was used to get further information from company executives. From the analysis, an Overall the R-Square of all the regressions was generally high denoting that the strength of association between the variables was high meaning that the share price is dependent on Earnings per share, Dividends per share, GDP and the exchange rate. These variables were seen to be statistically significant since the p value was less than a point five. The study revealed that there was indication of some strong relationship from variables such as earnings per share, exchange rates and dividends per share. The study recommends that firms should take keen consideration on earnings per share, dividends per share, exchange rate and Real GDP in order to enhance the share prices of firms listed in the NSE.
Keywords: Dividends per share, expected future earnings, Level of growth rate, Earning news, Share price, initial public offer IPO, and quoted companies in Kenya