DETERMINANTS OF MARKET PRICE OF COMMON STOCK OF LISTED INDUSTRIALIZED FIRMS IN NIGERIA

This study explores the effect of the dividend payout ratio on the share price of listed industrialized firms' common stock in Nigeria. This study comprises sixty-three industrialized firms whose shares were listed on the Nigerian stock exchange between 2008 and 2019. Fifty-one firms have been...

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Bibliographic Details
Published inGusau Journal of Accounting and Finance Vol. 2; no. 2
Main Authors Aishat Salawudeen, Abdullateef Ibrahim
Format Journal Article
LanguageEnglish
Published Department of Accounting and Finance, Federal University Gusau 01.04.2021
Subjects
Common Stock
Dividend Payout Ratio
industrilised firms Nigeria
Market Price
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Summary:This study explores the effect of the dividend payout ratio on the share price of listed industrialized firms' common stock in Nigeria. This study comprises sixty-three industrialized firms whose shares were listed on the Nigerian stock exchange between 2008 and 2019. Fifty-one firms have been used as a sample. Panel regression analysis was used to test the hypotheses of this study. The results showed that the dividend payout ratio, growth, and age significantly impacted the common stock market price. Also, leverage and firm size had a significant negative impact on the market price of the common stock. However, profitability has an insignificant impact on the market price of the common stock. Accordingly, this study concludes that the dividend payout ratio is essential for determining the common market price. It suggests that Nigeria's listed industrialized firms could restructure their dividend policies to the extent that the dividend payout ratio will be susceptible to shareholders' needs. It will promote more spending by shareholders (existing shareholders to retain their shareholding and invest in buying more shares when made available). It would help attract prospective investors to invest in the company's share, thus growing the wealth of existing shareholders.
ISSN:2756-665X