AN APPRAISAL ON THE EFFECT OF DIVIDEND POLICY ON MANUFACTURING FIRMS’ SHARE VALUE. (A CASE STUDY OF SELECTED COMPANIES IN NIGERIA)
The purpose of this research work is to highlight an appraisal on the effect of dividend policy on manufacturing firms’ share value. Dividend Policy is one of the three major policy areas of financial management since Nigeria Stock Companies came into existence. it determine the distribution of earning between payments to stockholders and investment or reinvestment in the firm. It could be seen as to constitute the cash flow that accures to the stockholders. The major objective of the study is to determine the effect of dividend policy on manufacturing firms’ share value. Other objective is to ascertain the relationship between dividend per share and earning per share of manufacturing firm, to ascertain the companies dividend policy that satisfies the objectives of maximizing owners wealth. The study had a population of forty (40) quoted manufacturing firms. Out of which a sample size of fifteen (15) were selected using Yaro Yamani formula. The ex –post facto research design was adopted in the study. Three (3) hypotrheses was tested using correlation co-efficient. It was found out that there is no effect of dividend policy on manufacturing firms’ share value, There is no significant relationship between earning per share and dividend per share, Dividend policy satisfy the objective of maximizing owner wealth. Thus, it is recommended that financial managers should have information on the factors in the economy that affects the behavior of investors in their purchase of stock before any public reissue. Nigeria Stock Exchange should maintain its reliance on the force of demand and supply alongside its daily biding system because it tends to give the firms a fair assessment before the public in an unstable business environment.