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Dividend Policy and the Profitability of Selected Quoted Manufacturing Firms in Nigeria: An Empirical Analysis

Received: 23 May 2016     Accepted: 12 June 2016     Published: 6 July 2016
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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.

Published in Journal of Finance and Accounting (Volume 4, Issue 4)
DOI 10.11648/j.jfa.20160404.17
Page(s) 212-224
Creative Commons

This is an Open Access article, distributed under the terms of the Creative Commons Attribution 4.0 International License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution and reproduction in any medium or format, provided the original work is properly cited.

Copyright

Copyright © The Author(s), 2016. Published by Science Publishing Group

Keywords

Dividend Policy, Profitability, Quoted Manufacturing Firms, Return on Investment and Net Profit Margin

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Cite This Article
  • APA Style

    Henry Waleru Akani, Yellowe Sweneme. (2016). Dividend Policy and the Profitability of Selected Quoted Manufacturing Firms in Nigeria: An Empirical Analysis. Journal of Finance and Accounting, 4(4), 212-224. https://doi.org/10.11648/j.jfa.20160404.17

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    ACS Style

    Henry Waleru Akani; Yellowe Sweneme. Dividend Policy and the Profitability of Selected Quoted Manufacturing Firms in Nigeria: An Empirical Analysis. J. Finance Account. 2016, 4(4), 212-224. doi: 10.11648/j.jfa.20160404.17

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    AMA Style

    Henry Waleru Akani, Yellowe Sweneme. Dividend Policy and the Profitability of Selected Quoted Manufacturing Firms in Nigeria: An Empirical Analysis. J Finance Account. 2016;4(4):212-224. doi: 10.11648/j.jfa.20160404.17

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  • @article{10.11648/j.jfa.20160404.17,
      author = {Henry Waleru Akani and Yellowe Sweneme},
      title = {Dividend Policy and the Profitability of Selected Quoted Manufacturing Firms in Nigeria: An Empirical Analysis},
      journal = {Journal of Finance and Accounting},
      volume = {4},
      number = {4},
      pages = {212-224},
      doi = {10.11648/j.jfa.20160404.17},
      url = {https://doi.org/10.11648/j.jfa.20160404.17},
      eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.jfa.20160404.17},
      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.},
     year = {2016}
    }
    

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  • TY  - JOUR
    T1  - Dividend Policy and the Profitability of Selected Quoted Manufacturing Firms in Nigeria: An Empirical Analysis
    AU  - Henry Waleru Akani
    AU  - Yellowe Sweneme
    Y1  - 2016/07/06
    PY  - 2016
    N1  - https://doi.org/10.11648/j.jfa.20160404.17
    DO  - 10.11648/j.jfa.20160404.17
    T2  - Journal of Finance and Accounting
    JF  - Journal of Finance and Accounting
    JO  - Journal of Finance and Accounting
    SP  - 212
    EP  - 224
    PB  - Science Publishing Group
    SN  - 2330-7323
    UR  - https://doi.org/10.11648/j.jfa.20160404.17
    AB  - 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.
    VL  - 4
    IS  - 4
    ER  - 

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Author Information
  • Department of Banking and Finance, Faculty of Management Science, Rivers State, University of Science and Technology Nkpolu, Port Harcourt, Rivers State, Nigeria

  • 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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