THE INCREMENTAL INFLUENCE OF CORPORATE DIVIDEND POLICY ON FINANCIAL PERFORMANCE

Abstract

Due to the information value of the dividends, dividends are considered significant in the firms. A change in dividend policy is usually considered as function of companies’ profitability. However, it is not clear how various proxies of dividend policy influences the financial performance of a firm. Therefore, this study is aimed as unraveling this issue on listed consumer goods firms in Nigeria. The study employed various components of dividend policy, namely; dividend pay-out ratio, dividend yield, dividend per share and dividend intensity. Financial performance was measured by return on equity. The research used secondary data obtained from thirteen consumer goods companies firms listed on the Nigeria stock exchange group (NGX) for a period of ten years 2013-2022. The study found that dividend pay-out, dividend yield and dividend intensity have positive and significant effect on the financial performance of listed consumer goods firm in Nigeria. The study further concludes that firms should be transparent on their dividend policies for so that investors will be informed in taking their decision as well as greater corporate governance practices.