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Influence of Dividend Policy on Stock Price Volatility of Non-Financial Firms Listed Nigerian Stock Exchange

Author

Listed:
  • Taofeek O. Agbatogun

    (Department of Accounting, College of Management Sciences, Federal University of Agriculture, Abeokuta, Ogun State, Nigeria)

  • Sunday O. Kajola

    (Department of Accounting, College of Management Sciences, Federal University of Agriculture, Abeokuta, Ogun State, Nigeria)

  • Olufemi Amos Akinbola

    (Department of Business Administration, College of Management Sciences, Federal University of Agriculture, Abeokuta, Ogun State, Nigeria)

Abstract

Stock Price Volatility with Dividend Policy pose relevant factors to an investor’s choice in stock investment. The focus of the study was intelligent view on the long-run and short-run causal significance of dividend management on stock price volatility. Panel Auto Regressive Distribution Lag was conducted on listed non-financial firms in Nigeria. The result showed that Stock Price Volatility in the long-run based on a threshold of 1% level of significance is significant as movement of Dividend Payout Ratio, Dividend Yield, Earnings Volatility and Firm Size causes about 0.15%, 0.76%, and 0.008% increase and about 3% decrease respectively on change in stock price on the long run while in the short-run, all the variables except Earnings Volatility have insignificant effect. The study recommended that low dividend payout ratios at a stable rate serve as a good signal out to all investors for expectation of returns which in turn increases firm value and stabilize stock price.

Suggested Citation

  • Taofeek O. Agbatogun & Sunday O. Kajola & Olufemi Amos Akinbola, 2019. "Influence of Dividend Policy on Stock Price Volatility of Non-Financial Firms Listed Nigerian Stock Exchange," Business & Management Compass, University of Economics Varna, issue 1, pages 35-49.
    • Handle: RePEc:vrn:journl:y:2019:i:1:p:35-49
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    More about this item

    Keywords

    Dividend Yield; Dividend payout Ratio; Stock Price Volatility; Earning Volatility; Firm size;
    All these keywords.

    JEL classification:

    • G35 - Financial Economics - - Corporate Finance and Governance - - - Payout Policy

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