IMPACT OF FINANCIAL LEVERAGE AND DIVIDEND POLICY ON SHARE VALUE OF QUOTED OIL AND GAS COMPANIES IN NIGERIA
IMPACT OF FINANCIAL LEVERAGE AND DIVIDEND POLICY ON SHARE VALUE OF QUOTED OIL AND GAS COMPANIES IN NIGERIA
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Date
2017-07
Authors
AKUDU, Adze Musa
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Abstract
The study examines the impact of financial leverage and dividend policy on share value of quoted oil and gas companies in Nigeria. A total of sample of eight oil and gas companies quoted on the Nigerian Stock Exchange were studied, and panel data was obtained from their annual reports and accounts and price list from the Nigerian Stock Exchange for a period of 10 years (2006-2015). The data was analysed using descriptive statistics and inferential statistics, that is, panel regression technique. The study finds that the financial leverage measures; total debt to total capital ratio and interest coverage ratio have significant positive impact on share value of the quoted oil and gas companies in Nigeria. Similarly, it was found that the share value of the companies was positively and significantly driven by the dividend policy indicator; retained earnings ratio. However, the second dividend policy measure; dividend coverage ratio has a positive but insignificant impact on the share value of the quoted oil and gas companies in Nigeria. The study recommends that the management of the quoted oil and gas companies in Nigeria should explore the use of more debt capital in financing their investment opportunities in order to boost their share value in the capital market. It is also recommended that the management of the companies should retain a larger proportion of the company’s earnings for growth and ensure strict utilization of retained earnings on profitable investments and viable projects that will enhance the company’s financial health and consequently boost the share value of the company in the stock market
Description
A THESIS SUBMITTED TO THE SCHOOL OF POSTGRADUATE STUDIES, AHMADU BELLO UNIVERSITY, ZARIA
IN PARTIAL FULFILLMENT OF THE REQUIREMENTS FOR THE AWARD
OF MASTER OF SCIENCE DEGREE IN ACCOUNTING AND FINANCE
DEPARTMENT OF ACCOUNTING
FACULTY OF ADMINISTRATION
AHMADU BELLO UNIVERSITY,
ZARIA
Keywords
IMPACT,, FINANCIAL LEVERAGE,, DIVIDEND POLICY,, SHARE VALUE,, QUOTED OIL,, GAS COMPANIES,, NIGERIA