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Abstract
In this study, the impact of dividend policy on share price of firms Listed on oil and gas sector of Nigerian Exchange Limited (NGX) was examined. In order to determine the relationship between dividend policy and share price of firms, dividend policy key proxy variables were used in the study, namely; dividend yield (DIY), dividend per share (DPS) and dividend payout (DPR) while share price (SP) on the other hand was measured using market price of shares (SP). The study also control for size of firm (FZ) in the model specification. Three hypotheses were formulated to guide the investigation and the statistical test of parameter estimates was conducted using OLS panel least model operated with Eviews 9.0. Longitudinal research design was adopted and data for the study were obtained from the Nigerian Annual Reports and Accounts of listed oil and gas firms in Nigeria spanning from 2010 - 2021. The findings generally indicate that dividend yield, dividend per share and firm size have exerted significant impact on share price of the selected oil and gas firms. Based on this, the study concludes that dividend policy is capable of influencing oil and gas firms’ share prices in Nigeria. By this implication, the study supports the relevant theories of dividend policy reviewed in this study as irrelevant theories of dividends do not hold in the case of Nigeria. The study recommends among others that firms’ willing to maximize share price should consistently increase their dividend per share and reduce their dividend yield as this sends signal to the investors about the firm’s market performance and financial health
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