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Dividends Policy and Market Value of Shares In Selected Quoted Deposit Money Banks in Nigeria

(1)Adeboye Akinwunmi Ph.D-PhD FCCA MARES Senior Lecturer (Banking & Finance) College of Social & Management Sciences, Achievers University, Km 1, Idasen-Ute Road, P. M. B. 1030, Owo – Ondo State, Nigeria. Phone: + 234 (0) 8126637825 Email:adeboyeakin@yahoo.co.uk, www.achievers.edu.ng- (2)Akinola, Akinwunmi Olusegun-Department of Accounting, Achievers University, Owo, Nigeria


This study examined the relationship between dividend policy and market value of shares of quoted deposit money banks in Nigeria in relation to the restrictions of dividend payments as spelt out in Section 17 of the Banks and Other Financial Institutions Act (2007). The objectives of the study were: to ascertain the relationship between dividend payout ratio, earnings per share, profit after tax and market value of shares. The Study was predicated on dividend relevance theory and irrelevance theory of dividend. The panel data research design methodology was adopted using secondary data. The secondary data were obtained from annual reports of the ten quoted deposit money banks. The multiple regression, i.e. Panel Least Square method, was used to test the relationship between the variables for the period 2001-2017. The result showed that dividend policy has a significant positive impact on market value of shares of deposit money banks in Nigeria, implying that all variables relating to dividend policy in the study under the period specified contributed positively and strongly to the market value of shares of deposit money banks listed in the Nigerian Stock Exchange. The study concluded that dividend policy is a pertinent corporate finance function and financial policy decision which affects the market value of shares of deposit money banks in Nigeria. The study, therefore, recommended that management of quoted deposit money banks should take all necessary steps to ensure that they remain profitable. They should pay attention to their dividend payout in order to sustain their shareholders’ wealth and attract prospective investors.

Key words: Dividends Policy, Market Value

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