Effect of Dividend Policy on Share Price Movement: Focusing on Companies Listed on the Nigerian Stock Exchange Market

I., Kadiri Kayode; Olorunmade, Gbenga; Ayobami, Raji Lukmon

doi:10.21272/fmir.6(4).101-118.2022

Cited by 5 publications

(5 citation statements)

References 37 publications

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“…Total and direct effects of dividend yield have a negative and significant influence on a share price that indicates low or (high) dividend yield negatively impacts high or (low) share price. The result was comparable to earlier studies' outcomes of Allen and Rachim (2014), Singh and Tandon (2019), and Kayode et al (2022). The result revealed an insignificant and negative indirect effect of dividend yield on share price through return on assets (b1 = -0.0396, t = -1.03).…”

Section: Resultssupporting

confidence: 87%

“…However, retention ratio has little impact on stock prices. A statistically significant correlation exists between dividend yield and stock price volatility and a negative correlation between share price movement and business size (Kayode et al, 2022). dividend yield, dividend payout ratio, and firm size also affect share price volatility.…”

Section: Empirical Studiesmentioning

confidence: 92%

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The Effects of Dividend Policy On the Price of Shares of Microfinance Companies In Developing Countries

Bahadur Budhathoki,

Khadka

2024

SEC

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The strategy of dividend policy implementation in the context of business value growth is the subject of debates in theoretical and empirical research. Dividends and retained earnings are two alternatives that investors have when deciding how to distribute their income. According to the bird-in-the-hand theory, a company’s value is maximized by paying large dividends, because investors consider the payouts less risky than capital gains, regular high dividend payments serve as an information signal to market participations about the current and future financial stability, which attracts new investors and allows attracting more external resources. Instead, according to Miller and Modigliani’s dividend irrelevancy theory, corporate value is influenced not by the division of income into dividends and retained earnings, but by investment policy and income from assets. There is a lack of research in the literature that examines the relationship between dividend payouts and stock prices in developing countries (especially in Nepal) and there is no empirical evidence that profitability can moderate this relationship. The article examines the influence of dividend yield, retention ratio and dividend payout ratio on share price both in general and directly, and indirectly-through return on assets and return on equity. The information base is data for the 2017-2021 financial years on 61 Nepalese microfinance institutions (10 of which were the direct object of the study) registered on the Nepal Stock Exchange (NEPSE), obtained from the official websites of the relevant institutions, ShareSansar and NEPSE statistics. SPSS software (PROCESS v4.3) was used for data analysis. Descriptive statistics, the correlation and regression analysis were used for the analysis. The article analyzes three types of effects: total, direct and indirect. The overall effect of dividend yield on share price is negative, the retention ratio is positive and significant, and the dividend payout ratio is negative and significant. The direct effect of the dividend yield on the stock price is negative, the retention ratio and the dividend payout ratio are positive and insignificant. The indirect effect of dividend yield and retention ratio on share price through return on assets is negative and insignificant, and through return on equity it is positive and significant. The indirect effect of the dividend payout ratio through the return on assets is positive and significant. However, the return on shareholders’ capital has a negative and insignificant effect on the share price.

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Section: Resultssupporting

confidence: 87%

Section: Empirical Studiesmentioning

confidence: 92%

The Effects of Dividend Policy On the Price of Shares of Microfinance Companies In Developing Countries

Bahadur Budhathoki,

Khadka

2024

SEC

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“…Previous research conducted by (Septyadi & Bwarleling, 2020), (Marini & Sutrisna Dewi, 2019), (Dewi & Paramitha, 2019) (Zainudin et al, 2018, (Sugathadasa, 2018), (Nurleli & Wibisono, 2021), (Akram Ahmad et al, 2018), (Hieu Nguyen et al, 2020), (Khan, 2019), (Kayode I. et al, 2022), (Singh & Tandon, 2019), (Fiorenza et al, 2023), (Hossin & Ahmed, 2020), which states that dividend payments negatively affect stock price volatility. A high Dividend Payout Ratio (DPR) indicates the company has strong cash flow and is able to pay high dividends.…”

Section: Introductionmentioning

confidence: 92%

Effects of Stock Trading Volume, Leverage, and Dividend Payout Ratio on Stock Price Volatility

Kartawijaya,

Hasibuan

2024

JSA

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This study aims to analyze the impact of stock trading volume, leverage, and dividend payout ratio (DPR) on stock price volatility among companies included in the Kompas100 Index and listed on the Indonesia Stock Exchange (IDX) from 2018 to 2022. The data used in this research were obtained from the financial statements available on the official IDX website and additional data from Yahoo Finance. A purposive sampling method was used to select the research sample based on specific criteria. The results of the study indicate that stock trading volume and leverage have a significant positive impact on stock price volatility, while DPR also influences volatility by showing changes that can elicit sharp market reactions. These findings provide important insights for investors and company management regarding factors that can increase risk and uncertainty in stock prices in the market.

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“…In Nigeria, Kayode et al (2022) observed that dividend yield negatively and significantly influences share price movement, while the influence of firms' size is positive and significant on stock price volatility. In Nigeria, Emeka and Onyeogubalu (2021) showed that dividend payout, dividend yield and dividend per share significantly and positively influence firms' share price.…”

Section: Dividend Per Share and Market Price Per Sharementioning

confidence: 99%

Factors Affecting Share Performance of Quoted Deposit Money Banks in Nigeria

O.,

A. A.

2024

African Journal of Accounting and Financial Research

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The study examined the factors affecting share performance of quoted deposit money banks in Nigeria. The study adopted ex-post facto research design, and the population of the study consisted of all deposit money banks quoted in Nigeria as at 31st December, 2022. However, nine (9) banks were selected as sample size using a judgmental sampling technique. Data for the study were obtained from the annual reports and accounts of the nine (9) deposit money banks for the period of 10 years ranging from 2013-2022. The study used the OLS regression model as a technique of data analysis. The study found that earnings per share has a significant positive effect on market price per share. Meanwhile, dividend per share and price earnings ratio have an insignificant positive effect on market price per share, while book value per share has an insignificant negative effect on market price per share of quoted deposit money banks in Nigeria. The study recommends that corporate organizations, particularly corporate companies, should develop and implement strategies that will help improve their earnings per share, dividend per share and price earnings ratio in order to increase their share performance in the market.

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Effect of Dividend Policy on Share Price Movement: Focusing on Companies Listed on the Nigerian Stock Exchange Market

Cited by 5 publications

References 37 publications

The Effects of Dividend Policy On the Price of Shares of Microfinance Companies In Developing Countries

The Effects of Dividend Policy On the Price of Shares of Microfinance Companies In Developing Countries

Effects of Stock Trading Volume, Leverage, and Dividend Payout Ratio on Stock Price Volatility

Factors Affecting Share Performance of Quoted Deposit Money Banks in Nigeria

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