Dividend Policy Determinants of Firm Value: Empirical Evidence from Listed Non-Financial Companies in Nigeria

Aroh Nkechi Nympha. Ph.D, Priscilla Uchenna. Ph.D Egolum and Chukwuani Victoria Nnenna. Ph.D
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Aroh Nkechi Nympha. Ph.D: Department of Accountancy, Faculty of Management Sciences, Federal Polytechnic Oko, Anambra State, Nigeria
Priscilla Uchenna. Ph.D Egolum: Department of Accountancy, Faculty of Management Sciences, Nnamdi Azikiwe University, P. M. B. 5025, Awka, Anambra State, Nigeria
Chukwuani Victoria Nnenna. Ph.D: Department of Accountancy, Faculty of Management Sciences, Enugu State University, Enugu State Nigeria

International Journal of Research and Innovation in Social Science, 2021, vol. 05, issue 07, 612-634

Abstract: The broad objective of this study is to empirically examine dividend policy as determinants of firm value of listed companies in Nigeria by employing apanel data of ten (10) year, from 2010 to 2019 time frame. To achieve this objective, we employed one notable measure of firm value (market to book ratio) and selected specific proxies of dividend policy which have been employed in related prior literature. To this end, we hypothesized that dividend policy measures which include; dividend yield, dividend per share and dividend pay-out ratio are no significant determinants of firm value across listed non-financial firms during the period under investigation in Nigeria. Robust least square regression analysis was employed to test the formulated hypotheses. Results obtained from the descriptive statistics revealed that dividend pay-out is an insignificant determinant of market to book value shown as; DIVPAY (Coef. = -0.0001, t = -0.34 and P -value = 0.737). Again, dividend per share has a significant positive influence on market to shown as; DIPS (Coef. = 0.7692, t = 61.98 and P -value = 0.000). More so, dividend yield has a significant (1%) negative effect on market to book value shown as; DIYD (Coef. = -0.0500, t = -5.63 and P -value = 0.000). From the findings, we conclude that dividend yield and dividend per share are determinants of firm value. However, dividend pay-out ratio is not a significant determinant of firm value in Nigeria. It is recommended that management should concert policies and efforts which will reduce profits share to investors and redirect those funds as retained earnings for the purpose of growing the company.

Date: 2021
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