IMPACT OF DIVIDEND POLICY ON STOCK PRICE: EVIDENCE FROM BANKS, OIL & GAS AND FOOD & BEVERAGES FIRMS LISTED ON THE NIGERIA STOCK EXCHANGE
NDUKWE ORJI DIBIA *
Department of Accounting, Faculty of Economics and Management Science, Abia State University, Uturu. Nigeria.
*Author to whom correspondence should be addressed.
Abstract
The purpose of this study is to investigate the impact of dividend yield & payout on the stock prices of quoted banking, petrochemicals and food & beverages firms in Nigeria. Data was extracted from the audited financial statements of the nine selected firms and two Nigerian Newspapers and data extracted was subjected to econometric testing using Panel Least Squares method and the Panel Estimated Generalized Least Square (EGLS) to correct violations of assumption of Classical Linear Regression Model (CLRM). Findings shows that dividend payout ratio positively affects share prices of the nine selected quoted firms, whereas dividend yield possesses an adverse effect on share prices of the nine selected quoted firms in Nigeria. On the other hand, increase in firm size possesses an adverse effect on share prices of the nine selected quoted firms in the case of Nigeria. Recommendations and policy options relevant to firms and stakeholders at large were proffered herein.
Keywords: Dividend yield, dividend payout ratio, stock prices, panel EGLS