THE ROLE OF DIVIDEND POLICY IN DETERMINING THE MARKET VALUE OF SHARE OF LISTED INDUSTRIAL GOODS COMPANIES IN NIGERIA

2021 ◽  
Vol 9 (1) ◽  
pp. 7-19
Author(s):  
Muhammad Mustapha ◽  
◽  
Modu Buni ◽  
Abdullahi Idriss ◽  
◽  
...  
Keyword(s):  
Dividend Policy ◽  
Stock Exchange ◽  
Critical Evaluation ◽  
Market Value ◽  
Share Price ◽  
Annual Reports ◽  
Dividend Yield ◽  
Dividend Payout ◽  
Ex Post

This study examines the role of dividend policy in determining the market value of share of listed industrial goods companies in Nigeria, the research design used as a guide is ex-post facto method, as the study entails the use of annual reports and accounts of listed industrial goods companies in the Nigerian Stock Exchange (NSE). The secondary data were sourced from the company’s financial report for the period of five years from 2013 to 2017 contained in company’s annual reports and account and all were used to compute the dependent variable (share price) while dividend payout ratio and dividend yield as proxies of independent variable respectively. Regression analysis is use establish the relationship between the variables by using Statistical Software (SPSS). The result showed that there is no positive significant relationship between dividend payout ratio, dividend yield and share price of listed industrial goods companies in the Nigeria. Based on findings the study recommends that the existing investors in the Nigerian industrial goods sector should from time to time; ensure extensive and critical evaluation of dividend policy as it can significantly influence their market value which has ultimate effect on the investments.

scholarly journals Impact of dividend policy on stock price volatility and market value of the firm: evidence from Sri Lankan manufacturing companies

2016 ◽  
Vol 13 (3) ◽  
pp. 219-225 ◽  
Author(s):  
UGVDD Gunarathne ◽  
WAN Priyadarshanie ◽  
SMRK Samarakoon
Keyword(s):  
Dividend Policy ◽  
Negative Impact ◽  
Price Volatility ◽  
Market Value ◽  
Share Price ◽  
Sri Lankan ◽  
Manufacturing Companies ◽  
Dividend Yield ◽  
Dividend Payout ◽  
The Impact

The impact resulted from the dividend policy of a firm on the volatility of the market value of stocks is the major concern of this study, which is an issue bearing an utmost significance, when considering the objectives of a corporate. The focus of an entity should be aligned on the maximization of stock holders’ wealth and this necessitates the selection of an optimum dividend policy. The present study, thus, attempts to shed a light on the above fact within the Sri Lankan context. Data was collected from a sample of companies listed under the manufacturing sector of the Colombo Stock Exchange from year 2006 to 2014. The study occupied panel data regression model for analysis. The outcome revealed that the dividend yield of the current year has a negative impact on the share price volatility, while the dividend payout ratio of both the current and previous years has a positive impact. In addition, the impact of dividend yield is negative on the market value of the firm, where the dividend payout ratio of the current year is also depicts the same impact. The findings of the study reassure the findings of the previous researchers within the Sri Lankan context in case of the market value of the firm while being contrary in case of the share price volatility. Accordingly, the firms’ ability of utilizing the dividend policy as a mechanism of controlling the volatility of share prices is established. However, it will not be effective in altering the market value of the firm.

scholarly journals PENGARUH KEBIJAKAN DIVIDEN SEBAGAI VARIABEL PEMODERASI DARI HUBUNGAN KINERJA KEUANGAN DAN KINERJA PASAR TERHADAP NILAI PERUSAHAANPADA PERUSAHAAN MANUFAKTUR YANG TERDAFTAR DI BURSA EFEK INDONESIA(2011 - 2015)

2016 ◽  
Vol 3 (2) ◽  
pp. 195
Author(s):  
Vedy Vedy ◽  
Susi Dwimulyani ◽  
Bayu Dewangkoro
Keyword(s):  
Firm Value ◽  
Dividend Policy ◽  
Stock Exchange ◽  
Economic Value ◽  
Value Added ◽  
Market Value ◽  
Economic Value Added ◽  
Dividend Yield ◽  
Dividend Payout ◽  
Market Value Added

<p class="Default"><em>The purpose of this research is to investigate and analyze the effect of financial and market performance </em><em>(net profit margin, debt to equity ratio, current ratio, price earning ratio, economic value added, and market value added) to firm value in manufacturing companies listed on the Stock Exchange Indonesia, as well as to indentify and analyze whether the dividend policy (dividend payout ratio and dividend yield) as a moderating variable affect correlation variable of net profit margin, return on equity, debt to equity ratio, current ratio, price earning ratio, economic value added, dan market value added to firm value. Population of this research amount to 143 companies which were manufacturing company listed on the Indonesia Stock Exchange the year 2011-2015. Sample selected by using method of purposive sampling amount to 26 companies. Data was processed using the method of data panel regression statistical test by using Eviews version 8.0 software. </em></p><em>The result of this research shows that (1)</em><em> profitability ratio and dividend payout ratio affect negatively to firm value. Leverage, liquidity ratio, market ratio,economic value added, market value added and dividend yield affect positively to firm value. (2) Dividend policy which measured with dividend payout ratio is able to moderate the effect of profitability ratio, leverage ratio, liquidity ratio and market ratio to firm value. Dividend policy which measured with dividend payout ratio is not able to moderate the effect ofeconomic value added and market value added to firm value. (3) Dividend policy which measured with dividend yield is able to moderate the effect of profitability ratio, market ratio, economic value added and market value added to firm value. Dividend policy which measured with dividend yield is not able to moderate the effect of leverage ratio and liquidity ratio to firm value</em>

scholarly journals The Determinant of Equity Share Price and the Listed Deposit Money Banks in Nigeria

2019 ◽  
Vol 2 (2) ◽  
pp. 127-142
Author(s):  
Godwin Emmanuel Oyedokun ◽  
Olusegun Adebowale Arotolu ◽  
Harison Vincent
Keyword(s):  
Stock Exchange ◽  
Secondary Data ◽  
Least Square ◽  
Share Price ◽  
Annual Reports ◽  
Dividend Payout ◽  
Financial Variables ◽  
Ex Post ◽  
Price Earnings Ratio ◽  
Ex Post Facto

In this study, the researcher examined the financial variables influencing the share price of listed deposit money banks in Nigeria. An ex-post facto research design was employed with the population consisting of all fifteen (15) listed deposit money banks on the Nigeria Stock Exchange (NSE), and a sample of twelve (12) listed deposit money banks on NSE was taken using filter criteria and judgemental sampling techniques. Secondary data used were sourced from the annual reports of the sampled banks and GTI Securities Ltd. for five years period from 2013-2017. Ordinary Least Square (OLS) was used to analyze the data. The results of the multiple regression revealed that the dividend payout ratio and price-earnings ratio have a significant positive relationship with the share price. The results also showed that dividend yield has a significant negative association with share price; the book value per share has no meaningful relationship with the share price. This study recommends that the shareholders in the deposit money banks should be guided by industry financial ratios, especially the profitability measures of price-earnings ratio and dividend payout ratio, as they are critical factors in predicting share price behavior.

scholarly journals Determinants of Share Price of Nepalese Commercial Banks

2016 ◽  
pp. 187-198 ◽  
Author(s):  
Yuga Raj Bhattarai
Keyword(s):  
Commercial Banks ◽  
Stock Exchange ◽  
Positive Association ◽  
Share Price ◽  
Annual Reports ◽  
Inverse Association ◽  
Dividend Yield ◽  
Significant Positive Association ◽  
Price Earnings Ratio ◽  
Economic Journal

This study examines the determinants of share price of commercial banks listed on the Nepal Stock Exchange Limited over the period of 2006 to 2014. Data were sourced from the annual reports of the sampled banks and analyzed using regression model. The results revealed that earning per share and price- earnings ratios have the significant positive association with share price while dividend yield showed the significant inverse association with share price. The major conclusion of the study is that dividend yield, earning per share and price-earnings ratio are the most influencing factors in determining share price in Nepalese commercial banks. Economic Journal of Development Issues Vol. 17 & 18 No. 1-2 (2014) Combined Issue,Page: 187-198

Effect of Dividend Policy on Stock Price Volatility in Nigeria Stock Exchange

2019 ◽  
Vol 9 (2) ◽  
pp. 219
Author(s):  
Felix Ebun Araoye ◽  
Akinola Michael Aruwaji ◽  
Emmanuel OlusuyiAjayi
Keyword(s):  
Stock Price ◽  
Dividend Policy ◽  
Positive Impact ◽  
Stock Exchange ◽  
Panel Data Analysis ◽  
Price Volatility ◽  
Share Price ◽  
Dividend Payout ◽  
Share Prices ◽  
Duration Effect

This paper seeks to determine the effect of dividend policy and dividend payment on share price volatility in Nigeria. Several literatures have showed evidence that dividend policy vary inversely proportional with share price volatility with duration effect. The study used data from the actively trading companies listed in the Nigeria Securities Exchange for a period of ten (10) years from 2005–2014. The estimation is based on panel data analysis between dividend policy measures (dividend payout, dividend per share, earnings after tax, dividend declared and number of share) and Share price volatility. The findings from the random effects regression results showed dividend per share is the major determinants of share price volatility in NSE (β = 0.6870, ρ<0.05). Dividend payout ratio negatively affect share price volatility (β =0.612, ρ>0.05) and earnings after tax negatively affect share price volatility (β =0.038, ρ>0.05).Thus, the higher the payout ratio the less the share price volatility, and the higher the earnings after tax lower the share price volatility. In conclusion, dividend per share has positive effect and inclusive relationship with market share prices. It is recommended that firms should try and improve on their financial performance that will enable consistent increase in the dividend per share for positive impact on market value.

scholarly journals PENGARUH KEBIJAKAN DIVIDEN TERHADAP VOLATILITAS HARGA SAHAM DENGAN INFLASI SEBAGAI VARIABEL MODERASI

2020 ◽  
Vol 2 (2) ◽  
pp. 85-94
Author(s):  
Patricia Maurin Aten ◽  
Dade Nurdiniah
Keyword(s):  
Stock Price ◽  
Sampling Method ◽  
Stock Exchange ◽  
Price Volatility ◽  
Financial Statements ◽  
Annual Reports ◽  
Manufacturing Companies ◽  
Dividend Yield ◽  
Stock Price Volatility ◽  
Dividend Payout

This study aims to analyze the effect of dividend payout ratio and dividend yield on stock price volatility with inflation as a moderating variable in manufacturing companies listed on the Indonesia Stock Exchange for the period 2013-2017. Documentary data (secondary) from financial statements and annual reports are used in this study. The population of this study includes manufacturing companies listed on the Stock Exchange from 2013-2017 and IPOs at least from 2013. The sampling method used in this study was purposive sampling, of which 44 companies were included in the criteria of this study. The analytical method carried out in this study is multiple regression. The results show that the variable that has a significant influence on stock price volatility is only the dividend payout ratio. The more dynamic the dividend payout ratio, the higher the stock price volatility, and vice versa. Research also shows the results that the inflation variable does not moderate the effect of dividend payout ratio and dividend yield on stock price volatility. Keywords: dividend payout ratio, dividend yield, stock price volatility, inflation

scholarly journals Influence of dividend policy on sharia stock price volatility

2020 ◽  
Vol 9 (7) ◽  
pp. 84-92
Author(s):  
Irton Irton
Keyword(s):  
Stock Price ◽  
Dividend Policy ◽  
Stock Exchange ◽  
Hypothesis Test ◽  
Price Volatility ◽  
Secondary Data ◽  
Stock Index ◽  
Dividend Yield ◽  
Stock Price Volatility ◽  
Dividend Payout

The main object of this research is to examine whether dividend policy in the form of dividend payout ratio and dividend yield influences the volatility of sharia stock price in the Indonesian Stock Exchange. This research uses the quantitative method by using the secondary data collected from the published Indonesian Stock Exchange. The sample in this research is 106 companies registered in the Indonesian Sharia Stock Index (ISSI) in 2016-2018. The dependent variable in this research is stock price volatility while the independent variables are dividend payout ratio, dividend yield, and data of earnings volatility, debt, and size that are collected and processed from the company financial report. Multiplied regression analysis is used for correlation test and hypothesis test using the SPSS software program version 15.0. The result of the research shows a shred of evidence that dividend per share and dividend payout ratio have no influence on the stock price volatility. The result of research can help the investors to select the sharia shares, and for companies, this research is useful to determine the dividend policy

scholarly journals DIVIDEND POLICY DECISIONS AND SHARE PRICES RELATIONSHIP

2020 ◽  
Vol 2 (2) ◽  
pp. 76-81
Author(s):  
Shamik Tiwari ◽  
Debajyoti Pal
Keyword(s):  
Cash Flow ◽  
Trading Volume ◽  
Dividend Policy ◽  
Stock Exchange ◽  
Free Cash Flow ◽  
Dividend Yield ◽  
Stock Trading ◽  
Dividend Payout ◽  
Policy Influence ◽  
Share Prices

Dividend policy is about a company’s decision related to the retention of profit and distribution of profit. In this study, the objective is to understand the effects of dividend policy on share prices for the selected companies in the Indonesian stock exchange. The findings of the study are that higher dividend yield stocks along with higher pre-tax risk adjusted returns give investor some compensation for the disadvantageous position of tax return. The findings are matching with the Brennan’s model (Brennan, 1970). The findings of the study also pointed out that increase in a company’s stock trading volume influence the share prices and investors who wanted current investment income owned shares in high dividend payout firms. Free cash flow is causing conflict between management and shareholders and this is another important finding of the study. Overall, results shows that a company’s dividend policy influence its share prices.

scholarly journals Determinants of Dividend Payout Policy of Listed Corporations in Nigeria

2019 ◽  
pp. 134-141
Author(s):  
Peter E. Ayunku ◽  
Dumani Markjackson
Keyword(s):  
Dividend Policy ◽  
Negative Impact ◽  
Positive Impact ◽  
Stock Exchange ◽  
Payout Policy ◽  
Policy Statement ◽  
Company Size ◽  
Dividend Payout ◽  
Ex Post ◽  
The Universe

This study examines the underlying components that determine the dividend policy statement of corporations in Nigeria. The study purposively select ninety-four (94) corporations out of the universe of companies listed in the Nigerian Stock Exchange. Financial ratios were extracted and computed from published annual audited financial reports spanning 2007 to 2017. This was informed by the ex-post facto research design adopted to observe key indicators of these corporations in retrospect. The panel regression analysis was used to explain the numerical phenomenon collated. The Durbin-Wu-Hausman specification test found the fixed effect model to be more suitable. The empirical results indicate that financial leverage has a significant negative impact on dividend payout; liquidity has an insignificant positive impact on dividend payout policy; profitability has an insignificant positive impact on dividend payout decision; and company size has a significant positive impact on dividend payout dicision. The study concluses that liquidity, profitability and company size are the determinants of the dividend policy of corporations in Nigeria. More specifically, company size was found to be a major determinant to the dividend policy statement of corporations in Nigeria. The study suggests that, corporations should sustain their liquid positions, asset base and profit levels at all times to meet the universe of desires of their shareholders.

scholarly journals A systematic review of dividend policy in relation to stock price volatility

2021 ◽  
Vol 6 (1) ◽  
pp. 92-104
Author(s):  
Sheena Bhatta ◽  
Bal Ram Duwal
Keyword(s):  
Stock Price ◽  
Dividend Policy ◽  
Stock Exchange ◽  
Negative Relationship ◽  
Price Volatility ◽  
Manufacturing Companies ◽  
Dividend Yield ◽  
Stock Price Volatility ◽  
Dividend Payout ◽  
The Impact

When it comes to determining a dividend policy that would maximize shareholder value, focusing merely on how much of the firm’s profit is necessary for dividend distribution and reinvestment is insufficient. It is critical to analyze the impact of their dividend choice on the stock price.The purpose of this study is to scrutinize the impact of dividend policy on stock price volatility. The report investigated the relationship between the dividend policy and stock price volatility taking 8 articles between 2010 to 2020. Likewise, following a systematic literature review method, the study critically analyzed the selected articles based on their strengths and weaknesses. The findings suggest that, in most of the cases demonstrated by authors, dividend policy has a significant negative relationship with the stock price volatility. The stock’s price volatility often decreases after the declaration of dividend payout ratio and dividend yield. Based on the results of this study, it can be implied that, managers of manufacturing companies and banks, those listed in the stock exchange, may be able to reduce the price volatility of their stock by increasing dividend payout and dividend yield. Since the study is limited to 4 databases, further studies could include some more articles from top-rated databases that signify dividend policy in diverse sectors to derive even more accurate results.

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