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

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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)

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.

Suggested Citation

  • Eze Gbalam & Akwarandu Uzochukwu, 2020. "Moderating Effect of Dividend Policy and Share Prices of Quoted Firms in Nigeria," International Journal of Research and Scientific Innovation, International Journal of Research and Scientific Innovation (IJRSI), vol. 7(2), pages 215-220, February.
    • Handle: RePEc:bjc:journl:v:7:y:2020:i:2:p:215-220
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    References listed on IDEAS

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    1. John Capstaff & Audun Klæboe & Andrew P. Marshall, 2004. "Share Price Reaction to Dividend Announcements: Empirical Evidence on the Signaling Model from the Oslo Stock Exchange," Multinational Finance Journal, Multinational Finance Journal, vol. 8(1-2), pages 115-139, March-Jun.
    2. repec:eme:mfppss:v:36:y:2010:i:5:p:394-413 is not listed on IDEAS
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