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Shareholder Wealth Maximization and Investment Decisions of Nigerian Food and Beverage Companies

Author

Listed:
  • Shodiya Olayinka Abideen

    (Department of Business & Finance, Crescent University, Abeokuta)

  • Sanyaolu Wasiu Abiodun

    (Department of Accounting, Crescent University, Abeokuta)

  • Ojenike Joseph Olushola

    (Department of Business & Finance, Crescent University, Abeokuta)

  • Ogunmefun Gbadebo Tirimisiyu

    (Deputy Bursar, Bursary Department, Crescent University, Abeokuta)

Abstract

The study examines the effect of shareholder wealth maximization on investment decision in food and beverage companies listed in Nigeria. To achieve this, seven listed food and beverage companies were selected. The research adopted an ex post facto research design, while purposeful and stratified sampling techniques were used to select seven out of the fifteen companies in the food and beverage subsector. Data for the study were extracted from the annual reports and accounts of the sampled companies from 2008–2017. The result obtained from the regression analysis reveals that earnings per share and market price per share have no significant positive effect on investment decisions, while dividend per share was found to have no significant negative effect on investment decisions. In effect, the study concludes that the unique combination of the identified proxies for shareholder wealth maximization have jointly a significant positive effect on investment decisions. Arising from this, the study recommends that food and beverage companies should improve more on earnings per share, dividend per share, and market price per share so as to attract more investment from shareholders.

Suggested Citation

  • Shodiya Olayinka Abideen & Sanyaolu Wasiu Abiodun & Ojenike Joseph Olushola & Ogunmefun Gbadebo Tirimisiyu, 2019. "Shareholder Wealth Maximization and Investment Decisions of Nigerian Food and Beverage Companies," Acta Universitatis Sapientiae, Economics and Business, Sciendo, vol. 7(1), pages 47-63.
    • Handle: RePEc:vrs:auseab:v:7:y:2019:i:1:p:47-63:n:1004
    DOI: 10.1515/auseb-2019-0004
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    Keywords

    earnings per share; dividend per share; market price per share; shareholder wealth maximization; investment decision; consumer goods companies;
    All these keywords.

    JEL classification:

    • M10 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - General

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