Dividend Policy on Financial Performance: A Case Study of Selected Registered Firm in Nigeria

Abstract

Dividend policy serves as a mechanism for control of a managerial opportunism. The objective of the study is toascertaining the relationship between dividend policy and corporate profitability, Investment and Earning perShares. Data for the study were extracted from annual report and accounts of twenty five quoted companies inNigeria. These data were subjected to regression analysis, using Eview software and the findings indicate that;There is a positive and significant association between the firm performance and dividend policy of the sampledfirm. The study furtherly shows that there is a strong and positive significant relationship between ROCE,ASSTand dividend policy. NOTE,ROCE is used in proxy of profit of the firm after tax while ASST is used in proxy ofinvestment of the firm. While EPS shows a positive impact on the firm dividend policy. It is herebyrecommended that Organizations should effectively appropriate fund available to them and manage it in such away that more profit can be generate which will in turn lead to increase in the shareholders’ dividend. Secondly,adequate monitoring and supervision should be embarked upon by the firm to ensure prudency and properaccountability.Keywords: dividend, causality, earning per shares and profitability.