EFFECT OF DIVIDEND POLICY ON THE VALUE OF FIRMS IN NIGERIA, A CASE STUDY OF SOME LISTED COMPANIES, 1976 - 1986
EFFECT OF DIVIDEND POLICY ON THE VALUE OF FIRMS IN NIGERIA, A CASE STUDY OF SOME LISTED COMPANIES, 1976 - 1986
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Date
1987-10
Authors
GABRIEL, OWOPE, ADETUN
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Abstract
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A B S T R A C T
The aim of every investor is to invest in
such shares or stocks that will maximise his/her
wealth. Dividend Payments and Capital gains form
the basic sources of earnings in investment in
stocks. In order to enjoy any of the two sources,
the firm must have a sound corporate performance.
However, cash dividends drain funds that should have
constituted i t s savings and consequently lowers the
capital gain.
This study attempts to ascertain the importance
of dividend as a determinant of investment preference.
To ascertain t h i s , the writer t r i e d to determine the
importance of dividend against an equally important
factor - corporate performance.
In the course of the research, the Development
of the Stock Market in Nigeria is reviewed. Twenty
l i s t e d companies in the Nigerian Stock Exchange are
used as the sample size.
The following form part of the summary of
the findings:-
1. The r i c h - l i t e r a t e constitute the majority
of investors in stocks in Nigeria, followed
by i n s t i t u t i o n a l investors;
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2. Dividend Policy is the most important
factor influencing investors in stocks
in Nigeria;
3, Where an investor is to choose between
dividend payment and capital gain or
corporate performance, tie will go for
dividend.
The researcher made some recommendations
amongst which are:-
1 • That the Federal Government of Nigerian
should recycle her shareholdings in quoted
companies in order to make more shares
available in the market.
2. The Federal as well as the State Governments
should channel the privatisation policy
through the Nigerian Stock Exchange for the
same reason in (1) above.
3. That a general enlightenment campaign
programme aimed at educating the illetrates
be carried out by conducting television
and radio programmes in local languages.
Description
Department of Business Administration
Faculty of Administration
Ahmadu Belle university, Zaria.
Keywords
EFFECT,, DIVIDEND,, POLICY,, VALUE,, FIRMS,, NIGERIA, CASE,, STUDY,, LISTED,, COMPANIES,