Capital Structure and Dividend Policy of Listed Conglomerate Companies in Nigeria: A Panel Data Analysis

Ahmed Ishaku Aca, Hirhyel Ibrahim Abba Cna, Jamila Muktar and Habib Abdulkarim Cna
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Ahmed Ishaku Aca: Department of accounting, Gombe state university
Hirhyel Ibrahim Abba Cna: Department of accounting, Gombe state university
Jamila Muktar: Department of accounting, Gombe state university
Habib Abdulkarim Cna: Department of accounting, Gombe state university

International Journal of Research and Scientific Innovation, 2020, vol. 7, issue 10, 295-299

Abstract: This study examined the relationship between capital structure and dividend policy of listed conglomerate companies in Nigeria. An ex-post facto research design was used because secondary data were extracted from annual report and account of the companies for the period of eight years (2012 – 2019), robust GLS regression analysis was used to analyze the data. The findings revealed that debt to equity ratio has a negative and significant relationship with dividend payout ratio, debt to asset ratio has a negative and significant effect on dividend payout ratio of listed conglomerate companies in Nigeria. Firm size, and age have positive and significant relationship with dividend payout ratio. However, Return on assets (ROA) has a positive but non-significant relationship with dividend payout ratio. The study conclude that debt serve as a monitoring mechanism to the absentee owners, hence its influence on the capital structure of business organization cannot be underestimated because of tax advantages. It is therefore recommended that management should only accept debt covenant that will enable them to pay dividend to shareholders.

Date: 2020
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