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Analysis of Divided Policy and Its Impact on Shareholders Wealth Maximization in Nigerian Firms (A Study of Brewery Industry)

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  • Cordelia Onyinyechi Omodero
  • Kalu Ogbonnaya Amah

Abstract

The study evaluated dividend policy and measured its impact on shareholders¡¯ wealth maximization in Nigerian firms (a study of brewery industry). A cross-survey research design was adopted and secondary data extracted from the published annual reports of the firms studied. The statistical tool used was a multi-regression analysis and t-test for hypotheses testing and data analysis with the aid of SPSS version 20. The result in Guinness Nigeria Plc., indicated the irrelevance of dividend policy. From the result, the DPS, EPS and NAPS which were the explanatory variables, had no positive impact on the market value per share (MPS) both collectively and individually. The result from Nigeria Breweries Plc., proved dividend policy is relevant to an extent to which earnings per share and net asset per share are positively affected. The F-ratio was 0.000 which shows a significant positive impact on the MPS. The earnings per share and net asset per share were also significant except the dividend per share which had no impact on the market value per share. The implication is that the growth in stock prices is not always a function of dividend payment.

Suggested Citation

  • Cordelia Onyinyechi Omodero & Kalu Ogbonnaya Amah, 2017. "Analysis of Divided Policy and Its Impact on Shareholders Wealth Maximization in Nigerian Firms (A Study of Brewery Industry)," Applied Economics and Finance, Redfame publishing, vol. 4(5), pages 1-8, September.
    • Handle: RePEc:rfa:aefjnl:v:4:y:2017:i:5:p:1-8
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    References listed on IDEAS

    as
    1. James E. Walter, 1963. "Dividend Policy: Its Influence On The Value Of The Enterprise," Journal of Finance, American Finance Association, vol. 18(2), pages 280-291, May.
    2. Merton H. Miller & Franco Modigliani, 1961. "Dividend Policy, Growth, and the Valuation of Shares," The Journal of Business, University of Chicago Press, vol. 34, pages 411-411.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    dividend policy; dividend per share; earnings per share; market price per share; net asset per share;
    All these keywords.

    JEL classification:

    • R00 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General - - - General
    • Z0 - Other Special Topics - - General

    Statistics

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