Abstract
This paper examined the influence of dividend payments on the price of share of quoted manufacturing companies in Nigeria employing panel data with 125 data observations spanning from 2014-2018. A purposeful sampling technique was used to select twenty-five manufacturing companies investigated from the Nigerian stock market. A linear regression model was specified and was further broken down into a bivariate regression model and the method of least square regression was adopted for data analysis. The outcome of the panel regression indicated that, dividend per share has a positive influence on the price of shares of high and low geared manufacturing firms; earnings per shares positively influence the shares price of both dividend and non-dividend paying manufacturing companies; dividend yield show an adverse effect on the share price of new and old manufacturing companies; credit risk was found to positively impact share price of big manufacturing companies, but adversely affect the share price of small manufacturing companies in Nigeria. In view of the outcomes of the analysis, the study therefore recommended that a conducive and favorable business environment should be created by the government for both old and new manufacturing companies in Nigeria to thrive. Also, credit risk should be effectively and efficiently managed by small manufacturing companies in particular in order to eliminate its adverse influence on their share price.
Highlights
The basic concept of dividend payout as well as its policy has remained one of the major issues generating controversy in corporate finance
Secondary data were employed in this study and had been collected from the financial statement and average share prices per year of the chosen manufacturing companies quoted on the Nigerian stock exchange spanning from 2004-2018
This study appraises the influence of dividend payment on share prices of the quoted manufacturing firms in Nigeria
Summary
The basic concept of dividend payout as well as its policy has remained one of the major issues generating controversy in corporate finance. Since the inception of joint stock firms, the payment of dividend by firms has become an interesting issue in financial literature. The modeling as well as the evaluation of corporate dividend payout and returns had been engaged by financial economists as they influence the stock price of firms in Nigeria (AlQudah et al, 2015). A great value is performed by dividends to restore confidence to the shareholders and it is extremely significant as a result of its negative influence on the values of share. A stable policy on dividend is anticipated to bring about a higher price of share due to the high level investors’ confidence regarding the potential of the firm to make higher profit in the future. At the end of every financial period, firms assess their financial performance by determining whether earnings had been actualized or not
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