Dividend
policy is a crucial decision area, one of the most important decisions in
financial policy, not just from the company's point of view, but also from the
shareholders' and other stakeholders' point of view. This study analysed the
relationship between the dividend policy and the market value of Nigeria's
quoted deposit money bank shares in relation to the dividend payment
restriction as set out in Section 17 of the Banks and Other Financial
Institutions Act (2007). The aims of the analysis were: to determine the
relationship between the pay-out ratio of dividends; earnings per share; profit
after tax; and the market value of shares. The research was based on the theory
of dividend significance and the theory of dividend irrelevance. Using
secondary data, the panel data analysis design approach was adopted. The
secondary data was collected from the annual reports of the ten deposit money
banks quoted. Multiple regressions, i.e. The relationship between the variables
for the period 2001-2017 was evaluated using the Panel Least Square process.
The results showed that the dividend policy has a positive significant effect
on the market value of deposit money bank shares in Nigeria, indicating that
all variables have a positive impact on the market value of deposit money bank
shares. Over the period defined, the study's dividend policy contributed
positively and strongly to the market value of deposit money bank shares listed
on the Nigerian Stock Exchange. The study concluded that dividend policy is an
important corporate finance and financial policy decision mechanism that not
only affects the market value of deposit money bank shares in Nigeria from the
point of view of the shareholders of the banks, but also from that of
stakeholders such as workers and regulatory bodies. Consequently, the study
recommended that the management of quoted deposit money banks should take all
measures possible to ensure that they remain profitable. They should pay heed
to their Dividend pay-out to maintain the prosperity of their shareholders and
retain future buyers.
Author (s) Details
Dr. Akinwunmi, Adeboye
Department of Banking and Finance, Achievers University, Owo, Nigeria.
Department of Accounting, Achievers University, Owo, Nigeria.
View Book :- https://bp.bookpi.org/index.php/bpi/catalog/book/345
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