Dividend Policy and Share Price Volatility of Quoted Firms in Nigeria

International Journal of Economics and Management Studies

© 2021 by SSRG - IJEMS Journal

Volume 8 Issue 12

Year of Publication : 2021

Authors : Okolie Augustine Oke, Ordu Eze Kwame

10.14445/23939125/IJEMS-V8I12P105

How to Cite?

Okolie Augustine Oke, Ordu Eze Kwame, "Dividend Policy and Share Price Volatility of Quoted Firms in Nigeria," SSRG International Journal of Economics and Management Studies, vol. 8,  no. 12, pp. 24-32, 2021. Crossref, https://doi.org/10.14445/23939125/IJEMS-V8I12P105

Abstract:

The study examined the influence of dividend policy on the share price volatility of quoted firms in Nigeria from the year 2016 to 2020. Data on dividend policy and share prices were collated from seven firms quoted in the Nigerian stock exchange. Inferential statistics such as ordinary least square regression (OLS) on E-views software was used to analyse the panel data.The study revealed that dividend yield (coefficient = 11.79033; p>0.05%) and firm size (coefficient = 0.337610; p>0.05%) had positive influence on share price but was not statistically significant. The study also revealed that dividend payout ratio (coefficient = 150.6846; p<0.01%) and firm growth (coefficient = 0.169535; p<0.05%) had a positive influence on share price and were statistically significant at 1% and 5% levels of probability respectively. Firm size (coefficient = -27.26185; p>0.05) had a negative influence on share price but was not statistically significant. The study, therefore, recommended that investors should invest in firms that pay high dividends as this will lessen their investment risk and increase share price.

Keywords:

Dividend policy, Dividend yield, Share Price, Dividend Payout, Earnings Volatility, Share Price Volatility

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