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
vi 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; vii 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.
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Department of Business Administration Faculty of Administration Ahmadu Belle university, Zaria.
Keywords
EFFECT,, DIVIDEND,, POLICY,, VALUE,, FIRMS,, NIGERIA, CASE,, STUDY,, LISTED,, COMPANIES,
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