Effect of dividend policy on the share price of selected quoted companies in Nigeria

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dc.contributor.authorFagbemi, Temitope Olamide
dc.contributor.authorSalman, Ramat Titilayo
dc.contributor.authorLawal, Adeleke Ahmed
dc.date.accessioned2020-05-23T00:00:29Z
dc.date.available2020-05-23T00:00:29Z
dc.date.issued2016
dc.description.abstractDividend policy of companies determines what proportion of earnings is distributed by way of dividend to shareholders and what proportion is ploughed back for reinvestment purposes. However, Companies today belongs to different people with individual views on how to divide the company’s earnings between payouts and retention. This makes it difficult for corporate managers to make the most appropriate decision about the payout policy to be followed as it no doubts affects how each of the diverse investors place value on the company. Hence, this study investigated the effect of dividend policy on the share price of selected quoted companies in Nigeria. In addition, the study evaluated what influences share prices the most between dividends and earning and conducted an investigation into the sectoral effect of dividend policy on share price. Dividend signalling theory which is an extension of the dividend relevance theory was adopted for the study. The study adopted an analytical research design and 56 quoted companies were purposively sampled for the purpose of the study. Companies selected are companies with dividend record throughout the study period. Secondary data drawn majorly from the Fact book of the Nigerian Stock Exchange for the period covering 2006-2012 was used for the study. Two multiple regression models were statistically tested using panel least square method. The result of the empirical study carried out showed that dividend payout and dividend yield which are two important measures of dividend policy exerts a significant negative influence on the market price of shares of Nigerian quoted companies. This was significant at the 5% level. In addition, the study found that dividend paid to shareholders in Nigeria has a greater impact in the determination of the market price of shares than the earning streams of the companies and that the impact of dividend policy on share price differs from one sector to the other. The study therefore concluded that dividend policies matters in the shaping of the share prices of Nigerian quoted companies and recommended amongst other things that Managers of Nigerian companies should ensure their dividend payouts ratios are reduced in the face of profitable investment opportunities so as to increase the company’s share price.en_US
dc.identifier.citationFagbemi, T. O., Salman, R. T., & Lawal, A. A. (2016). Effect of Dividend Policy on the Share Price of Selected Quoted Companies In Nigeria. International Journal of Accounting, Finance and Management, 1(1), 117-142en_US
dc.identifier.urihttp://hdl.handle.net/123456789/3996
dc.language.isoenen_US
dc.publisherDepartment of Accounting, College of Social and Management Sciences, Afe Babalola University, Ado Ekiti, Nigeriaen_US
dc.subjectDividend policy,en_US
dc.subjectshare price,en_US
dc.subjectEarnings,en_US
dc.subjectQuoted companies,en_US
dc.subjectNigeriaen_US
dc.titleEffect of dividend policy on the share price of selected quoted companies in Nigeriaen_US
dc.typeArticleen_US

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