Title:
THE IMPACT OF DIVIDEND POLICY ON SHAREHOLDERS VALUE: EVIDENCE FROM NIGERIA

Authors:
Adeleke S. Sunmola, Obademi Olalekan Emmanuel

Abstract:
This paper focuses on the impact of three dividend policy mechanisms i.e. dividend pay-out, dividend per share and earnings per share) on shareholder's value as measured by (Market price per share) of a sample of thirteen firms from the banking and oil industries between 2008-2012. Using panel methodology and OLS as a method of estimation (the cross sectional regression analysis for banks and oil companies), the results provide evidence of a positive relationship between the dividend policy mechanisms (DPS, PAYR, and EPS) and MPS. The results further reveal that EPS and PAYR has positive impact on MPS at 5% level of significance, whereas PAYR for oil companies reveal that the relationship is negatively related to MPS at 1% level of significance. There exist a positive insignificant relationship between DPS and MPS. The implication of this is that firms should strive to formulate a dividend policy that ensures continuity and stability in dividend payment as this impacts on the value of the firm, hence the wealth of the shareholders.