Influence of Liquidity on Market Value of Deposit Money Banks

Adebayo Olagunju (), Aderemi Olalere Adebayo () and Jimoh Ibrahim ()
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Adebayo Olagunju: Department of Accounting, Osun State University, Osogbo, Nigeria
Aderemi Olalere Adebayo: Department of Accounting, Osun State University, Osogbo, Nigeria
Jimoh Ibrahim: Department of Accounting, Osun State University, Osogbo, Nigeria

Business & Management Compass, 2021, issue 4, 397-411

Abstract: This study assessed how liquidity influenced the market value of 12 listed Nigerian Banks within the range of 2011 and 2019 with 108 observations. Data was generated from certified annual reports of selected banks. The study employed descriptive and multiple regressions techniques to analyse data while relevant diagnostic tests were conducted to validate data. The result indicated that liquidity had a negative significant influence on earnings per share (EPS) and divided yield (D/y) respectively. Bank size had a positive significant influence on the (EPS). On the other hand, bank size had a negative significant influence on the (D/y). Leverage gave us the positive insignificant influence on the (EPS) but it had a positive significant association with (D/y) respectively. The study concluded that negative effect of liquidity can lead to a decline in the earnings and reduce the growth of investment thereby has adverse effects on dividend yield to shareholders.

Keywords: Earnings per share; dividend yield; leverage; liquidity; market value (search for similar items in EconPapers)
JEL-codes: C22 G21 (search for similar items in EconPapers)
Date: 2021
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