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Influence of Liquidity on Market Value of Deposit Money Banks

Author

Listed:
  • Adebayo Olagunju

    (Department of Accounting, Osun State University, Osogbo, Nigeria)

  • Aderemi Olalere Adebayo

    (Department of Accounting, Osun State University, Osogbo, Nigeria)

  • Jimoh Ibrahim

    (Department of Accounting, Osun State University, Osogbo, Nigeria)

Abstract

This study assessed how liquidity influenced the market value of 12 listed Nigerian Banks within the range of 2011 and 2019 with 108 observations. Data was generated from certified annual reports of selected banks. The study employed descriptive and multiple regressions techniques to analyse data while relevant diagnostic tests were conducted to validate data. The result indicated that liquidity had a negative significant influence on earnings per share (EPS) and divided yield (D/y) respectively. Bank size had a positive significant influence on the (EPS). On the other hand, bank size had a negative significant influence on the (D/y). Leverage gave us the positive insignificant influence on the (EPS) but it had a positive significant association with (D/y) respectively. The study concluded that negative effect of liquidity can lead to a decline in the earnings and reduce the growth of investment thereby has adverse effects on dividend yield to shareholders.

Suggested Citation

  • Adebayo Olagunju & Aderemi Olalere Adebayo & Jimoh Ibrahim, 2021. "Influence of Liquidity on Market Value of Deposit Money Banks," Business & Management Compass, University of Economics Varna, issue 4, pages 397-411.
    • Handle: RePEc:vrn:journl:y:2021:i:4:p:397-411
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    References listed on IDEAS

    as
    1. Merve Gizem Cevheroglu-Acar, 2018. "Determinants of Capital Structure: Empirical Evidence from Turkey," Journal of Management and Sustainability, Canadian Center of Science and Education, vol. 8(1), pages 31-45, March.
    2. Sri Hermuningsih, 2012. "Pengaruh Profitabilitas, Size Terhadap Nilai Perusahaan Dengan Sruktur Modal Sebagai Variabel Intervening," Jurnal Siasat Bisnis, Management Development Centre (MDC) Department of Management, Faculty of Business and Economics Universitas Islam Indonesia, vol. 16(2).
    3. Odunayo M. Olarewaju & Oluwafeyisayo K. Adeyemi, 2015. "Causal Relationship between Liquidity and Profitability of Nigerian Deposit Money Banks," International Journal of Academic Research in Accounting, Finance and Management Sciences, Human Resource Management Academic Research Society, International Journal of Academic Research in Accounting, Finance and Management Sciences, vol. 5(2), pages 165-171, April.
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    More about this item

    Keywords

    Earnings per share; dividend yield; leverage; liquidity; market value;
    All these keywords.

    JEL classification:

    • C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages

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