Abstract

This study examined the relationship between dividend policy and share price movements with evidence from firms listed on the Nigerian Stock Exchange. A systemization literary approach for data analysis was panel regression analysis and Generalized Methods of Moments (GMM). Panel data covering the year 2011-2020 were obtained from the financial statements of twenty firms listed on the Nigerian stock exchange. It was discovered that dividend yield has negative relationship with share price movement. It was discovered that Dividend yield has negative and significant relationship with Share price. It was revealed thatfirms’ size has positive and significant relationship with stock price volatility. The study therefore recommends that the stakeholders of quoted firms must make sure that percentage of earnings disbursed as dividends to shareholders have good influence on the value of the company’s common stock at the stock market on a continuous base. It was recommended that Stake holders should ensure that the ratio of a quoted company’s annual dividend compared to its share price have good influence on the value of the company’s common stock at the stock market on a frequent base. Also, the stake holders of quoted firms must map out strategies of increasing their sizes in terms of asset, branch creation etc., this will increase patronage and profit of quoted firms which can have good influence on the value of the company’s common stock at the stock market.

Keywords: Dividend Policy, Share Price Movement, Nigerian Stock Exchange, Dividend Payout.

JEL Classification: O13, Q13, Q17.

Cite as: Kayode, K., Gbenga, O. & Ayobami, R. (2022). Effect of Dividend Policy on Share Price Movement: Focusing on Companies Listed on the Nigerian Stock Exchange Market. Financial Markets, Institutions and Risks, 6(4), 101-118. https://doi.org/10.21272/fmir.6(4).101-118.2022

This work is licensed under a Creative Commons Attribution 4.0 International License

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