DETERMINANTS OF DIVIDEND GROWTH PATTERN OF THE DEPOSIT MONEY BANKS IN NIGERIA (A STUDY OF SELECTED BANKS)

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Date
2014-02-05
Authors
ABDULLAHI, M.
Role, Omanoba
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Abstract
ABSTRACT The study titled “Determinants of Dividend Growth Pattern of the Deposit Money Banks in Nigeria (A Case Study of Selected Banks)” was designed to investigate factors that influence the dividend growth pattern of Nigerian Deposit Money Banks. Using the confirmatory specification approach to model development, the study estimates the relationship between three explanatory variables – Earnings Per Share, Share Price, Inflation, and one explained variable –Dividend Growth Pattern by means of the least squares techniques. The population of the study is the 21 banks listed on the floor of NSE as December, 2009. Total of 7 banks were selected based on judgmental sampling technique adopted. Only secondary source of data was employed and the technique utilized for data analysis is multiple regression analysis. It was found that the three predictor variables- Earnings Per Share, Share Price and Inflation have a significant influence on the Dividend Growth Pattern of DMBs in Nigerian. The study also reveals that Inflation has the highest determining ability on the Dividend Growth Pattern of Deposit Money Banks in Nigeria followed by Earnings Per Share and then the Share Price. The study recommends that the Management of banks should improve their performance so as to: (1) increase earnings; (2) attract investors in which the shares prices of the banks are expected to rise and (3) Government policy should be directed at controlling inflation. These recommendations are expected to positively affect Dividend Growth of banks. Management of Deposit Money Banks should ensure persistent and sustainable growth in their dividend payment to shareholders. This will go a long way to retain the patronage of their existing customer while gaining the heart of potential investors. The banks should also ensure stability in their earnings since it is obvious that increase earnings increases growth in dividend.
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BEING A THESIS SUBMITTED TO THE POSTGRADUATE SCHOOL AHMADU BELLO UNIVERSITY ZARIA IN PARTIAL FULFILLMENT OF THE REQUIREMENTS FOR THE AWARD OF THE DEGREE OF MASTERS OF SCIENCE (M.SC) IN ACCOUNTING AND FINANCE OF AHMADU BELLO UNIVERSITY, ZARIA.
Keywords
DETERMINANTS DIVIDEND, BANKS GROWTH PATTERN, DEPOSIT MONEY BANKS, NIGERIA
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