Effect of Dividend Policy on Shareholders Wealth in Nigeria (1986 To 2016) (Published)
This study investigated the effect of dividend policy on shareholders wealth in Nigeria. Data were generated on market price per share (MPS), dividend per share (DPS), net asset per share (NAPS) and earnings per share (EPS) from annual report and accounts of twenty five quoted companies in Nigeria stock exchange (NSE) Fact book and daily official list. To analyze the data, the statistical tools that have been used are ordinary least square regressions (OLS), unit root tests, Johansen cointegration and error correction model (ECM) for predicting the dividend policy effect on shareholder’s wealth. The significance of the various explanatory variables has been tested by computing t-values. To determine the proportion of explained variation in the dependent variable, the coefficient of determination (R2) has been worked out. The significance of R2 has also been tested with the help of F-value. The results show that most of the variable except dividend per share had significant relationship with market price per share. The R2 and F-test shows that earnings, dividend and net assets has combined effect on market price of shares but none of these variables has direct independent influence in determining the price of share in the stock market. This paper, therefore conclude that dividend payout does not have effect on shareholders wealth and shareholders do not react to dividend information. It was therefore recommended that firms operating under this environment should ignore distribution of earning and concentrate with investments that will boost net assets.
Keywords: Dividend Policy, Nigeria, Shareholders Wealth
Ownership Structure and Dividend Policy in Nigerian Quoted Companies (Published)
The objective of the study was to examine the relationship between ownership structure and dividend policy in Nigeria. The ownership structure variables covered included; Managerial Ownership, Institutional Ownership and Foreign Ownership. The longitudinal research design was employed in the study as dividend policy was examined across time and cross section. The study employed the simple random sampling technique in selecting a sample size consisting of 70 companies The secondary data used for the study were retrieved from the audited financial statements of the various quoted companies from 2009 to 2016. The findings of the study revealed that Managerial Ownership (MOWN), Institutional Ownership (IOWN) Foreign Ownership (FOWN) have significant effects on dividend policy.Results from the dividend adjustment models reveal that the effect of ownership structure variables on dividend payout is strongly moderated by earnings changes especially in the full adjustment model. The study recommends that companies adopt a diverse ownership structure with elements of managerial, foreign and institutional presence as this can ensure that the dividend policy decision is one that is balanced and prevents expropriation, address agency issues and put the company in a sustainable path in the long run.
Keywords: Dividend Policy, Institutional Ownership Foreign and Ownership, Managerial Ownership