IIARD International Institute of Academic Research and Development

Journal of Accounting and Financial Management (JAFM )

E-ISSN 2504-8856
P-ISSN 2695-2211
VOL. 9 NO. 9 2023
DOI: https://doi.org/10.56201/jafm.v9.no9.2023.pg168.178

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Dividend Decisions and Market Value of Firms in Nigeria

OTUYA Sunday, OFEIMUN Godwin,OGWU Kevwe Rita, & EDIKE Sunday

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Abstract

The study investigated the factors that could influence dividend decision and value of the firm. Anchored on signaling theory, the study adopted both cross-sectional and longitudinal research designs. The population of the study consisted of all listed manufacturing firms in Nigeria. The final sample size after filtering was 41 manufacturing firms giving a total of 451 year end observations. The study adopted three separate econometric models for capturing and testing for the relationship between dividend decisions and firm value. Findings of the study revealed that profitability has a significant positive effect on dividend payout while availability of investment opportunities was found to be positive but not significant. Leverage was also found to have a negative but not significant effect on dividend payout. Further, dividend payout, profitability, leverage, and investment opportunities were found to have significant positive effect on firm value. The study concludes that dividend decisions influence value of listed manufacturing firms in Nigeria and recommends amongst others that corporate managers should implement dividend policy that will enhance shareholders wealth maximization and take care of the investment opportunities of the firm.

keywords:

Dividend Policy, Firm Value, Financial Leverage, Investment Opportunities

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References:

Adediran, S. A., & Alade, S. O. (2013). Dividend policy and corporate performance in Nigeria.
American Journal of Social and Management Sciences, 4(2), 71–77
Agyei, S. K., & Marfo-Yiadom, E. (2011). Dividend policy and bank performance in Ghana.
International Journal of Economics and Finance, 3(4), 202.
Akinleye, G. T. & Ademiloye, D.S. (2018). Dividend policy and performance of quoted
manufacturing firms in Nigeria. International Journal of Scientific and Engineering
Research, 9, 1768-1784
Arko, C. A., Abor, J., Adjasi, K. D. C., & Amidu, M. (2014). What influence dividend decisions
of firms in Sub-Saharan African? Journal of Accounting in Emerging Economics, 4(1), 57–
78

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