Dividend Policy and the Profitability of Selected Quoted Manufacturing Firms in Nigeria: An Empirical Analysis
Journal of Finance and Accounting
Volume 4, Issue 4, July 2016, Pages: 212-224
Received: May 23, 2016; Accepted: Jun. 12, 2016; Published: Jul. 6, 2016
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Authors
Henry Waleru Akani, Department of Banking and Finance, Faculty of Management Science, Rivers State, University of Science and Technology Nkpolu, Port Harcourt, Rivers State, Nigeria
Yellowe Sweneme, Department of Banking and Finance, Faculty of Management Science, Rivers State, University of Science and Technology Nkpolu, Port Harcourt, Rivers State, Nigeria
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Abstract
This paper examined the impact of dividend policy on the profitability of selected quoted manufacturing firms in Nigeria from 1981 – 2014. The objective was to investigate the existing relationship between dividend policy and profitability of the selected quoted manufacturing firms in Nigeria. Time series data were computed from financial statement of the selected quoted manufacturing firms and stock exchange factbook. Return on Investment (ROI) and Net Profit Margin (NPM) were modeled as our dependent variables while Dividend Payout Ratio (DPR), Retention Ratio (RR), Dividend Yield (DY) and Earnings per Share (EPS) were proxied as our independent variables. Multiple regressions with the aid of Statistical Package for Social Sciences Research (SPSS) were used as data analyses techniques. Multi co-linearity, co-linearity, Durbin Watson, F-statistics and regression coefficient were used to determine the dynamic relationship between the variables. Findings revealed that all the independent variables have positive relationship with the dependent variables except dividend yield. The study recommends that operational efficiency of Nigerian financial market should be deepened and management should strengthen its effort for effective dividend policy that will increase the profitability of the quoted manufacturing firms Nigeria.
Keywords
Dividend Policy, Profitability, Quoted Manufacturing Firms, Return on Investment and Net Profit Margin
To cite this article
Henry Waleru Akani, Yellowe Sweneme, Dividend Policy and the Profitability of Selected Quoted Manufacturing Firms in Nigeria: An Empirical Analysis, Journal of Finance and Accounting. Vol. 4, No. 4, 2016, pp. 212-224. doi: 10.11648/j.jfa.20160404.17
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Copyright © 2016 Authors retain the copyright of this article.
This article is an open access article distributed under the Creative Commons Attribution License (http://creativecommons.org/licenses/by/4.0/) which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.
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