Dividend Policy Determinants of Firm Value in Nigeria
DOI:
https://doi.org/10.51699/ajdes.v9i.299Keywords:
Dividend Policy, Firm Value, Dividend Yield, Dividend per Share, Robust Least Square RegressionAbstract
Based on the Signalling theory framework, this study x-ray on the fundamental roles of dividend policy acting as a determinant of firm value. Specifically, this paper aims to explore the determinants of firm value from the dimension of corporate dividend policy by exploring a sample of eight-one (81) non-financial firms listed on the floor of the Nigerian stock exchange market during the period between 2010 and 2018. Dividend policy proxies that were considered in this study includesdividend yield and dividend per share which were also the independent variables while firm value (dependent variable) is proxied with firms’ market to book ratio. In this study, robust least square regression analyses technique is employed to evaluate the panel data set that were collated from annual financials reports of the sampled non-financial companies. The findings indicates that dividend per share indeed does determine firm value. This outcome is consistent with the signalling theory which promotes the policy of paying higher dividend to shareholders and equally serve as a weapon for averting managers’ self-interest which is detrimental to shareholder’s interest. Therefore,we carefully recommend that since profitability drives dividend and dividends influence the share prices of the firms, managers may use dividend per share to convey information on the competitiveness of their firms.
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