Impact of dividend policies on firm performance

Expectedly, this exercise was meant to lead to increased productivity and higher returns for the shareholders of firms in Nigeria, Aregbeyen and Olufemi Data collected from the NSE fact books, the annual reports and accounts of listed firms and those from the regulatory authorities were analysed using the Ordinary Least Squares regression model.

This is evident in a study by Kouki and Guizani who found managerial ownership to have a significant level of influence on dividend payout.

The statistically significant and positive relationship between profitability and dividend policy may be a sign of good corporate governance system in place. On the other hand, it is also important to note that non-payment of dividends may be seen by shareholders and other stakeholders as signalling adverse effect of economic activities of the firm on its performance, Rozeff, ; Jensen, ; Bhattacharya ; John and Williams The investment, financing, and valuation of the corporation, Review of Economics and Statistics.

The sample selection is based on a number of criteria previously employed in similar studies such as Adelegan In dividend policy decision, management needs to decide the amount, ratio and pattern of distributions to shareholders over time. Nevertheless, for the purpose of research, it is also important to expand the frontier of this study by choosing a larger sample size with additional variables.

Furthermore, high dividend payout helps to guarantee reduced funds available for consumption by the agent. Expectedly, these investments are to be managed by the agent in order to ensure good return on investment to the shareholders.

The first step in the residual dividend model to set a target dividend payout ratio to determine the optimal capital budget.

Distribution of incomes of corporations among dividends, retained earnings and taxes. A signalling equilibrium, Journal of Finance, As stated above, dividend payment serves as a mechanism to compel the agent to approach both debt and capital market for finance to any profitable investment.

Theoretical agency models of dividends to ensure optimal contractual relationship between investors and corporate insiders are still sketchy. This, therefore, indicates the relevance of dividend policy to the value and performance of firms in Nigeria.

Consequently, it is essential for those entrusted with the affairs of the firm to allocate adequate time and other resources in the design and implementation of a robust dividend policy.

In addition, the banks were encouraged to inject fresh funds to boost their capital base, not only aimed at increasing stakeholders confidence, but to be able to support huge capital projects that will translate into meaningful economic growth and development. Discussion of Findings The summarized descriptive statistics of the explained and explanatory variables as presented in Table 1 below for the period torevealed the following observations.

Descriptive Statistical Analysis of Variables Furthermore, it can be seen too from the Table above that a large proportion of Nigeria firms in the sample study have corporate governance policy in place that guide the operations and activities of the firm.(dividend payout ratio, timing of dividend payments and form of dividend payments) had a significant positive impact on the value of the firm since their p-value was lower than the accepted critical value.

Firm size and leverage has a negative effect on financial performance of firms. This study aims to investigate impact of state ownership on firm performance and dividend policy in In order to deliver indication for effects of state ownership on firm performance and dividend payout policy, two regression models according Imam and Malik () have been estimated which.

() discussed dividend policy impact on firm performance and measurement of afrmprofitability. The research displayed a confident and significant corelationship between return on assets, progress in sales,equity, and dividend policy.

Dividend payment to stockholders are made on the guiding path describe by the dividend policy (Lie, ). paper is to establish the impact of dividend policy on shareholders’ wealth and firm performance in Pakistan. The conduct of dividend policy has been one of the most de. this paper the impact of dividend policy of the companies on the firm’s share prices is analysed and different views in the context of the semi-strong form of the efficient market hypothesis are contrasted.

Dividend Policy

Ho, H. () conducted a comparative study of dividend policies in Australia and Japan. They examines panel data the Australian stock market and the Japanese stock market.

The results reveal that dividend policies in Australia.

Impact of dividend policies on firm performance
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