IMPACT OF DIVIDEND PAYOUT AND UNCLAIMED DIVIDENDS ON STOCK PRICE IN NIGERIA
IMPACT OF DIVIDEND PAYOUT AND UNCLAIMED DIVIDENDS ON STOCK PRICE IN NIGERIA
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Date
2006-09
Authors
KIGHIR, APEDZAN EMMANUEL
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Abstract
This study is a response to the controversy among regulatory
authorities, company executives and registers of companies,
shareholders and the general public regarding the increasing incidence
of unclaimed dividends in Nigeria. Specifically, the research is aimed
at providing an in-depth investigation and analysis into the impact of
dividends payout and unclaimed dividends on stock price in Nigeria.
The increase in unclaimed dividends has consequences on the
efficiency and credibility of the Nigerian Stock Market and regulatory
authorities and hence a negative impact on the Nation’s efforts in
attracting portfolio investment into the economy. This study is
significant as it tries to capture the omitted variable ‘the
unclaimed dividends’, which earlier researchers had ignored in
dividends payout studies. The study employed survey design,
using cross-sectional secondary data from 55 companies quoted
on the Nigerian Stock Exchange to test the research hypotheses,
using statistical package for social sciences to perform the
regression. Questionnaires, interviews and group discussions
were used to collect the primary data. The study reveals that
there is a positive relationship between paid cash dividends and
current stock price; there is a positive relationship between
unclaimed dividends and current stock price. The study also
reveals that 50% (1:1) of impact of declared dividends on stock
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price in banking industry, 33.3% (2: 1) in manufacturing
industry and 50% (1:1) in Nigeria as a whole are as a result of inbuilt
slack of unclaimed dividends. The study recommends
issuance of a standard on dividends including unclaimed
dividends; setting a threshold value above which unclaimed
dividends must be reported to Securities and Exchange
Commission; establishment of Abandoned Financial Assets Trust
Fund and Amendment to CAMA 1990 and ISA 1999 to make it
mandatory that above a certain threshold value all companies
must include amount, names and addresses of all persons
entitled to unclaimed dividends of previous years in notes to the
accounts.
Description
BEING A DISSERTATION SUBMITTED TO THE
POSTGRADUATE SCHOOL, AHMADU BELLO UNIVERSITY,
ZARIA, IN PARTIAL FULFILLMENT OF THE REQUIREMENTS
FOR THE AWARD OF THE DEGREE OF DOCTOR OF
PHILOSOPHY IN ACCOUNTING AND FINANCE
Keywords
IMPACT, DIVIDEND, PAYOUT, UNCLAIMED, DIVIDENDS, STOCK, PRICE, NIGERIA