Dividends as a Determinant Factor of Share Price of Non-Financial Firms in Nigeria
- Post by: airjournals
- September 30, 2021
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This study explored the effectiveness of dividends as a determinant factor of share price of quoted non-financial firms in Nigeria. Specifically, the study focused on dividend yield, dividend payout, earning per share and book value per share in relation to share price of the selected non-financial firms. Samples of 75 companies from different sectors were used for the period of ten years spanning 2010 to 2019. The study adopted ex-post facto and cross-sectional research design. The secondary data were sourced from annual reports of the selected non-financial firms quoted in Nigeria stock exchange. Analytical techniques employed was panel least squares multiple regression analysis with some preliminary tests such as descriptive analysis, correlation analysis, variance inflation factor analysis and Hausman effects tests for the period of ten years. Result uncovered that book value per share and earnings per share are positive contributors to share price of non-financial firms in Nigeria while dividend payout and dividend yield are negative factors to share price. However, only earnings per share size exert significant influence; hence, earning per share is the major determinant factor of share price of quoted non-financial firms in Nigeria. The findings showed that about 91.9% of the changes in total variation in the share price of selected non-financial firms can be attributed to the joint effect of all the explanatory variables while about 8.1% was unaccounted for thereby captured by the stochastic error term. The study recommends among others, that managers of non-financial firms should pay more attention towards earnings per share and book value per share to boost their performance and hence add value to their share price.
Keywords: Dividend; Share Price; Non-Financial Firms; Least Squares Regression
1Nwobodo, Azuka Tina, 2Prof. Ifurueze, Meshack and 3Ofor, Nkechi Theresa, PhD