DIVIDEND POLICY AND VALUE OF LISTED NON-FINANCIAL COMPANIES IN NIGERIA: THE MODERATING EFFECT OF INVESTMENT OPPORTUNITY
The relationship between dividend policy (DP) and the value of firms (FV) has been investigated by several researchers in different jurisdictions. However, the findings of these researchers have been always inconsistent. This is due to the other factors that affect this relationship, which include...
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| Format: | Article |
| Language: | English |
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Department of Accounting and Finance, Federal University Gusau
2023-08-01
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| Series: | Gusau Journal of Accounting and Finance |
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| Online Access: | https://journals.gujaf.com.ng/index.php/gujaf/article/view/198 |
| _version_ | 1797641411671097344 |
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| author | Abubabkar Umar |
| author_facet | Abubabkar Umar |
| author_sort | Abubabkar Umar |
| collection | DOAJ |
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The relationship between dividend policy (DP) and the value of firms (FV) has been investigated by several researchers in different jurisdictions. However, the findings of these researchers have been always inconsistent. This is due to the other factors that affect this relationship, which include the investment opportunity (IO). This paper is therefore aimed to empirically examine the impact of dividend policy on firms’ value with investment opportunity as moderator. The population of the study consists of 102 listed Non-financial companies. Based on the criterion set by the researcher, a judgmental technique of sampling was used in selecting 30 non-financial companies from the year 2011 to 2020. Tobin’s’ Q (TQ) and Market Price Per share (MPS) are the proxies for firms’ value, while Dividend per share (DPS) dividend payout ratio (DPR) and dividend yield (DY) are the proxies for dividend policy. Investment opportunity (IO) was measured as fixed asset growth. The study also used Firms’ size (FSIZE), Leverage (LEV) and Industry dummy (IND) as control variables. Descriptive statistics, correlation, and Feasible Generalized Least Squares (FGLS) analysis were used. It was found that DP, DPR, and DY are statistically significant to influence TQ. While MPS was only influenced by DP and DY. It was also found that IO did not moderate the relationship between dividend policy and firm value. It is recommended that the management of corporations should put measures in place that will increase revenue and decrease expenses so that regular dividend payments could be maintained.
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| first_indexed | 2024-03-11T13:45:16Z |
| format | Article |
| id | doaj.art-75b464dedd684dddb92932131ca16c8b |
| institution | Directory Open Access Journal |
| issn | 2756-665X 2756-6897 |
| language | English |
| last_indexed | 2024-03-11T13:45:16Z |
| publishDate | 2023-08-01 |
| publisher | Department of Accounting and Finance, Federal University Gusau |
| record_format | Article |
| series | Gusau Journal of Accounting and Finance |
| spelling | doaj.art-75b464dedd684dddb92932131ca16c8b2023-11-02T10:36:52ZengDepartment of Accounting and Finance, Federal University GusauGusau Journal of Accounting and Finance2756-665X2756-68972023-08-014110.57233/gujaf.v4i1.198DIVIDEND POLICY AND VALUE OF LISTED NON-FINANCIAL COMPANIES IN NIGERIA: THE MODERATING EFFECT OF INVESTMENT OPPORTUNITYAbubabkar Umar0Yusuf Maitama Sule University, Kano The relationship between dividend policy (DP) and the value of firms (FV) has been investigated by several researchers in different jurisdictions. However, the findings of these researchers have been always inconsistent. This is due to the other factors that affect this relationship, which include the investment opportunity (IO). This paper is therefore aimed to empirically examine the impact of dividend policy on firms’ value with investment opportunity as moderator. The population of the study consists of 102 listed Non-financial companies. Based on the criterion set by the researcher, a judgmental technique of sampling was used in selecting 30 non-financial companies from the year 2011 to 2020. Tobin’s’ Q (TQ) and Market Price Per share (MPS) are the proxies for firms’ value, while Dividend per share (DPS) dividend payout ratio (DPR) and dividend yield (DY) are the proxies for dividend policy. Investment opportunity (IO) was measured as fixed asset growth. The study also used Firms’ size (FSIZE), Leverage (LEV) and Industry dummy (IND) as control variables. Descriptive statistics, correlation, and Feasible Generalized Least Squares (FGLS) analysis were used. It was found that DP, DPR, and DY are statistically significant to influence TQ. While MPS was only influenced by DP and DY. It was also found that IO did not moderate the relationship between dividend policy and firm value. It is recommended that the management of corporations should put measures in place that will increase revenue and decrease expenses so that regular dividend payments could be maintained. https://journals.gujaf.com.ng/index.php/gujaf/article/view/198Dividend per sharedividend payout ratiodividend yieldTobins’ QMarket price per shareinvestment opportunity |
| spellingShingle | Abubabkar Umar DIVIDEND POLICY AND VALUE OF LISTED NON-FINANCIAL COMPANIES IN NIGERIA: THE MODERATING EFFECT OF INVESTMENT OPPORTUNITY Gusau Journal of Accounting and Finance Dividend per share dividend payout ratio dividend yield Tobins’ Q Market price per share investment opportunity |
| title | DIVIDEND POLICY AND VALUE OF LISTED NON-FINANCIAL COMPANIES IN NIGERIA: THE MODERATING EFFECT OF INVESTMENT OPPORTUNITY |
| title_full | DIVIDEND POLICY AND VALUE OF LISTED NON-FINANCIAL COMPANIES IN NIGERIA: THE MODERATING EFFECT OF INVESTMENT OPPORTUNITY |
| title_fullStr | DIVIDEND POLICY AND VALUE OF LISTED NON-FINANCIAL COMPANIES IN NIGERIA: THE MODERATING EFFECT OF INVESTMENT OPPORTUNITY |
| title_full_unstemmed | DIVIDEND POLICY AND VALUE OF LISTED NON-FINANCIAL COMPANIES IN NIGERIA: THE MODERATING EFFECT OF INVESTMENT OPPORTUNITY |
| title_short | DIVIDEND POLICY AND VALUE OF LISTED NON-FINANCIAL COMPANIES IN NIGERIA: THE MODERATING EFFECT OF INVESTMENT OPPORTUNITY |
| title_sort | dividend policy and value of listed non financial companies in nigeria the moderating effect of investment opportunity |
| topic | Dividend per share dividend payout ratio dividend yield Tobins’ Q Market price per share investment opportunity |
| url | https://journals.gujaf.com.ng/index.php/gujaf/article/view/198 |
| work_keys_str_mv | AT abubabkarumar dividendpolicyandvalueoflistednonfinancialcompaniesinnigeriathemoderatingeffectofinvestmentopportunity |