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The Impact of Dividend Policy on Stock Prices in Money Deposit Banks in Nigeria (1994-2019)

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  • ALASHE, Abdulganiyy Kayode

    (Department of Accountancy, School of Management and Business Studies, Lagos State Polytechnic, Ikorodu, Nigeria)

  • ISHOLA, Joseph Olaniyi

    (Department of Accountancy, School of Part Time Studies, Lagos State Polytechnic, Ikorodu, Nigeria)

Abstract

The tenacity of this study was to study the empirical influence of dividend policy on stock prices in Nigerian deposit banks. This study, which required the acquisition of historical data, used post-facto research. The population of the study was the twenty-two (22) money deposit banks in Nigeria. Secondary data through annual reports (1994-2019) for a period of 25 years was obtained from the selected banks. The Statistical Package for the Social Sciences software were used to describe observations through descriptive statistics, such as minimum, maximum, means and standard deviation, while the relationship between stock price and dividend policy was investigated through the use of inferential statistics such as regression analysis and correlation technics. The statistics showed a favorable and substantial influence on the stock price of a dividend per share (DPS) (= 0.1971; p 0.05). Earnings per share (EPS) were considerably beneficial to the share price (=0.0404; p0.05), however a lower positive influence was shown in the payout ratio (DPR) (=0.9227; p>0.05). During the study period, dividend policy had an influence on the stock prices of Nigerian deposit money institutions, according to the findings. The study therefore recommended that companies should strive for strong adherence to shareholders’ interests in adopting dividend policies that maximize shareholder value by management, among other things.

Suggested Citation

  • ALASHE, Abdulganiyy Kayode & ISHOLA, Joseph Olaniyi, 2021. "The Impact of Dividend Policy on Stock Prices in Money Deposit Banks in Nigeria (1994-2019)," International Journal of Research and Scientific Innovation, International Journal of Research and Scientific Innovation (IJRSI), vol. 8(12), pages 31-37, November.
    • Handle: RePEc:bjc:journl:v:8:y:2022:i:11:p:31-37
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    References listed on IDEAS

    as
    1. Rabindra Joshi, 2012. "Effects of Dividends on Stock Prices in Nepal," NRB Economic Review, Nepal Rastra Bank, Economic Research Department, vol. 24(2), pages 61-75, October.
    2. Rabindra Joshi, 2012. "Effects of Dividends on Stock Prices in Nepal," NRB Economic Review, Nepal Rastra Bank, Research Department, vol. 24(2), pages 61-75, October.
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