THE EFFECT OF DIVIDEND POLICY ON FIRMS’ PERFORMANCE OF NIGERIAN QUOTED COMPANIES
- Project Research
- 1-5 Chapters
- Abstract : Available
- Table of Content: Available
- Reference Style: APA
- Recommended for : Student Researchers
- NGN 5000
ABSTRACT
Dividend policy is used by listed companies to choose an amount out of its profit to retain and/or pay as dividend to their shareholders. The decision on Dividend Policy is one of the very important decisions to make and it is dependent on some factors such as liquidity, investment opportunities, etc. Companies’ financial performance is a very good indicator of their sustainability and that is where the interest of investors lies. The purpose of this study was to determine the effect of dividend policy on the performance of Nigerian Quoted companies. One Hundred and Sixty-Nine (169) firms trading on the Nigerian Stock Exchange as at 31st December, 2020 formed the study population while a sample of 56 companies was used. In arriving at the sample size, the Krejere and Moryan (1970) formula was adopted after which a number of companies whose financial accounts were not up to 20 years were removed. The financial statements of the companies from 1999 to 2018 were used. The dividend policy attributes used in this study were: Form of Dividend Payments (FDP), Timing of Dividend Payments (TDP), Earnings per Share (EPS), Price Earnings Ratio (PER) and Dividend Yield (DY) (known as determining factors). The dependent variable of the company (firm performance) was assessed by Return on Assets (ROA), Return on Equity (ROE) and Tobin’s Q for a robustness check. Descriptive statistics, correlation matrix and panel regression analyses were conducted using the econometric analysis software E-views 9. The result revealed that FDP showed a positive but insignificant relationship with Return on Assets (3.13, p=0.1032); TDP showed a negative but significant relationship with ROA (- 4.80 p=0.025); while EPS, PER and DY showed a positive and significant relationship with ROA (0.03, p= 0.00; 0.001, p=0.00; and 3.24, p=0.03). With Return on Equity, FDP, EPS and PER showed a positive and significant relationship with ROE (15.585, p=0.01; 0.044, p=0.00 and 0.004, p=0.00); TDP showed a negative but significant relationship with ROE (-18.04, p=0.003), while DY showed negative and insignificant relationship with ROE (-1.70, p=0.635). With Tobin’s Q, EPS and PER showed a positive and significant relationship with Tobin’s Q (0.001639, p=0.002; 0.000307, p=0.007), TDP and DY showed a negative and insignificant relationship with Tobin’s Q (-0.90, p=0.41; -3.60, p=0.18) while FDP showed a positive but insignificant relationship with Tobin’s Q (0.706, p=0.49). The study concluded that FDP had positive but insignificant relationship with firm performance; TDP had negative but significant relationship with firm performance, EPS and PER had positive and significant relationship with firm performance; while DY had negative and insignificant relationship with firm performance. The study recommended that Earnings per Share should be increased steadily to sustain growth and investment in the organization because an increase in earnings per share is directly proportional to the robust performance of firms in Nigeria. The outcome of the study contributes to the existing knowledge on dividend policy and firm performance since it is evident that the form of the dividend payment is directly proportional to the growth of firms in Nigeria.
Related Project Materials
ASSESSING THE IMPACT OF EARLY CHILDHOOD EDUCATION ON SUSTAINABLE AGRICULTURE PRACTICES
ABSTRACT: Assessing the impact of early childhood education on susta...
IMPACT OF FREE EDUCATION POLICY ON PUBLIC JUNIOR SECONDARY SCHOOLS
ABSTRACT
This study was carried out to examine the impact of free education policy on public...
Design of a Mobile‑Based Student Result Checking System: A Case Study of Jigawa State Polytechnic, Dutse, Dutse LGA
Background of the Study
Access to timely academic results is crucial for students to track their progress and plan for fut...
An Evaluation of Nurses’ Adherence to Standard Protocols in Managing Hypertensive Emergencies in Federal Medical Centre, Yola
Background of the Study
Hypertensive emergencies, characterized by severe elevations in blood pressur...
The Impact of Continuous Professional Development on Oncology Nurses’ Performance in Kogi State
Background of the Study
Continuous professional development (CPD) is crucial in healthcare to ensure that healthcare wor...
Development of a Machine Learning Model for Automated Course Recommendation in Ahmadu Bello University, Zaria, Kaduna State
Background of the Study
Automated course recommendation systems powered by machine learning (ML) have been widely adopted i...
FOREIGN DIRECT INVESTMENT AND ITS IMPACT ON THE DEVELOPMENT OF NIGERIAN ECONOMY (1990 – 2010)
ABSTRACT
Generally, policies and strategies of Nigerian government towards foreign direct investment are shaped by two principal objectiv...
The effect of informal education on students’ ability to navigate multicultural environments in Kafin Hausa Local Government Area, Jigawa State
Background of the Study:
In today’s increasingly diverse societies, the ability to navigate multicultural environment...
SYNTACTIC AND LEXICO-SEMANTIC ANALYSES OF SELECTED SMS TEXT MESSAGES AMONG THE UNIVERSITY OF ILORIN STUDENTS
ABSTRACT
Words form the basis for a Linguistic analysis at any level of language study. The aim of this essa...
AN ASSESSMENT OF THE EFFECT OF ENVIRONMENTAL FACTORS ON CORPORATE PERFORMANCE
ABSTRACT
The main objective of the study is to examine how the environmental factors could affect the corporate performa...
