Moderating Effect of Dividend Policy and Share Prices of Quoted Firms in Nigeria

Eze Gbalam and Akwarandu Uzochukwu
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Eze Gbalam: Department of Banking and Finance, Niger Delta University, Wilberforce Island, Bayelsa State, Nigeria
Akwarandu Uzochukwu: Department of Banking and Finance, University of Africa, Toru-Orua, Bayelsa State, Nigeria

International Journal of Research and Scientific Innovation, 2020, vol. 7, issue 2, 215-220

Abstract: This study empirically investigated the moderating effect of a firm size on the relationship between dividend policy and share price among consumer firms in Nigeria by employing a sample of twelve (12) consumer companies quoted on the Nigerian Stock Exchange. The data set was collated for 12 years (2007-2018) and employed the fixed effect regression technique. The results tend to annul the theory of Miller and Modigliani (1961) which suggests that dividend are irrelevant but lends credence to the ‘Bird in Hand Dividend Theory’ supported by Fairchild (2010). This suggests that larger firms have good chances of paying dividend which will lead to improvement in share price. This finding negates the dividend irrelevant proposition that dividend does not matter to corporate value.

Date: 2020
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