The Impact of Firm Characteristics on the Dividend policy of Listed Consumer Goods Manufacturing Companies in Nigeria
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TextPublisher: Ibafo Accounting 2022Edition: Dr. Onichabor PiusDescription: xi;54pgsSubject(s): Social Science -- AccountingSummary: ABSTRACT
In finance, dividend payout has long been a contentious topic. In the past, many researchers have
proposed theoretical models to describe what criteria managers should consider when deciding
whether or not to pay a dividend. The objective of this study was therefore to examine the impact
of firm characteristics on the dividend policy of listed consumer goods manufacturing companies
in Nigeria. Using ex-post facto research design, the estimated population size population consists
of all 20 consumer goods manufacturing companies while a sample of 10 randomly selected
consumer goods manufacturing companies was derived using the simple random sampling
technique. Independent variables that were used in this study included Profitability, financial
leverage, liquidity, and firm size and dependent variable was Dividend Payout Ratio. The data
was subjected to linear regression analysis to test the research hypotheses. The probability level
was set up at 0.05 significance. The result of the Linear Regression Analysis hence indicates a
significant and direct positive relationship between profitability and dividend payout of listed
consumer goods in Nigeria with a significance level of 0.031 (p<0.05), a very weak negative
nonsignificant correlation between financial leverage (LEV) and Dividend Payout Ratio (DPR)
with a significance level of 0.650 (p<0.05), a very weak negative and insignificant correlation
between Liquidity (LIQ) and Dividend Payout Ratio (DPR) with a significance level of 0.662
(p<0.05), a significant positive correlation between firm size (SIZ) and Dividend Payout Ratio
(DPR) with a significance level of 0.015 (p<0.05). This study however recommends that
Managers of consumer goods manufacturing firms in Nigeria should ensure that they have well- structured dividend policies in place as this will make the company shares attractive to investors
and however lead to increased stock prices and enhanced profitability. Keywords: Dividend, Liquidity, Profitability, Financial Leverage
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ABSTRACT
In finance, dividend payout has long been a contentious topic. In the past, many researchers have
proposed theoretical models to describe what criteria managers should consider when deciding
whether or not to pay a dividend. The objective of this study was therefore to examine the impact
of firm characteristics on the dividend policy of listed consumer goods manufacturing companies
in Nigeria. Using ex-post facto research design, the estimated population size population consists
of all 20 consumer goods manufacturing companies while a sample of 10 randomly selected
consumer goods manufacturing companies was derived using the simple random sampling
technique. Independent variables that were used in this study included Profitability, financial
leverage, liquidity, and firm size and dependent variable was Dividend Payout Ratio. The data
was subjected to linear regression analysis to test the research hypotheses. The probability level
was set up at 0.05 significance. The result of the Linear Regression Analysis hence indicates a
significant and direct positive relationship between profitability and dividend payout of listed
consumer goods in Nigeria with a significance level of 0.031 (p<0.05), a very weak negative
nonsignificant correlation between financial leverage (LEV) and Dividend Payout Ratio (DPR)
with a significance level of 0.650 (p<0.05), a very weak negative and insignificant correlation
between Liquidity (LIQ) and Dividend Payout Ratio (DPR) with a significance level of 0.662
(p<0.05), a significant positive correlation between firm size (SIZ) and Dividend Payout Ratio
(DPR) with a significance level of 0.015 (p<0.05). This study however recommends that
Managers of consumer goods manufacturing firms in Nigeria should ensure that they have well- structured dividend policies in place as this will make the company shares attractive to investors
and however lead to increased stock prices and enhanced profitability. Keywords: Dividend, Liquidity, Profitability, Financial Leverage
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