THE RESPONSIVENESS OF STOCK PRICES TO DIVIDEND YIELD: THE CASE OF LISTED NIGERIAN DEPOSIT MONEY BANKS

Godwin Imo Ibe

Abstract


This study examines the impact of dividend on stock prices. The study adopts the ex-post facto research design and data were handpicked from the annual report and statement of account of selected banks listed on the Nigerian Stock Exchange for the period. The findings of this study support the opposite view that dividend yields do not have positive and significant impact on stock prices. This implies that stock prices tend to increase when an increase in dividend is announced but tend to decrease when a decrease or omission is announced. 

 

Article visualizations:

Hit counter

DOI

Keywords


dividend, stock price, bank size

References


Amidu, M. (2007), “How Does Dividend Policy Affect Performance of the Firm on Ghana Stock Exchange?”, Investment Management And Financial Innovations, Vol. 4, Issue 2, Pp 103-112.

Baskin, J. (1989), “Dividend Policy and the Volatility of Common Stock”, Journal of Portfolio Management, Vol. 15 No. 3, pp 19-25.

Benartzi, S., Michaely, R. and Thaler, R. (1997), “Do Change in Dividends Signal the Future of the Post”, Journal of Finance, Vol. 52 No.3, July, pp1007-1034.

Black, F. (1976), “The Dividend Puzzle” Journal of Portfolio Management, Vol. 2, pp 5-8.

Black, F. and Scholes, M. (1974), “The Effect of Dividend Yield and Dividend Policy on Common Prices and Returns”, in Michael, C. J. and Clifford, W. S. (1984), The Modern Theory of Corporate Finance, New York: McGraw Hill, Inc.

Brigham, E.F. (1995), Fundamentals of Financial Management, New York; McGraw Hill in Compsey, B. J. and Brighman, E.F.C. (1985), Introduction to Financial Management, New York: The Dryden Press.

Damodaran, A. (2002), Corporate Finance, Theory and Practice International Edition, New York: John Wiley and Son.

DeAngelo, H., DeAngelo, L. and Skinner, D. J. (2003), “Are Dividend Disappearing? Dividend Concentration and the Consolidation of Earnings”, Journal of Financial Economics, March, pp 1-30.

Ezra, S. (1963), The Theory of Financial Management, New York; Columbia Press.

Ezra, S. (1969), The theory of Financial Management, Columbia; Columbia University Press.

Frankfurter, G. M. and Wood, B. J. (2002), “Dividend Policy Theories and their Empirical Tests”, International Review of Financial Analysis, Vol. 11 No. 2 pp 111-138.

Gordon, M. J. (1959), “Dividend, Earning, and Stock Prices”, The Review of Economics and Statistics, Vol. 41, pp 99-105.

Gordon, M. J. (1962), “The Savings Investment and Valuation of a Corporation”, The Review of Economics and Statistics, Vol. 44, pp 37-51.

Graham, B. and Dodd, D. L. (1934), Security Analysis, 1st edition, New York: McGraw Hill Book Co.

Grullon, G., Michaely, R. and Swaminathan, B. (2002), “Are Dividend Changes a Sign of Firm Maturity?” Journal of Business, Vol. 75, pp 387-424.

Gujarati, D. N and Porter, D. C. (2009), Basic Econometrics International Edition, Singapore: McGraw-Hill.

Huda, F. and Farah, T. (2011), “Determinants of Dividend Decision: A Focus on Banking Sector in Bangladesh”, International Research Journal of Finance and Economics ISSN 1450-2887 Issue 77, pp33-46.

Jensen, M. and Meckling, W. (1976). “Theory of the Firm: Managerial Behavior, Agency Costs, and Ownership Structure”, Journal of Financial Economics, Vol. 3, 305-360.

Lintner, J. (1956), “Distributions of Incomes of Corporation among Dividends, Retained Earnings and Taxes”, American economic Review, Vol. 46 No.1, pp 97-113.

Litzenberger, R. H. and Ramaswamy, K. (1982), “The Effects Dividends on Common Stock Prices Tax Effects or Information Effects”, The Journal of Finance, Vol. 37 No. 2 May, pp 429-443.

Mayo, H. B. (2008), Investments, Introduction International Studies: 9th edition, Canada: Thomson Higher Education.

Miller, M. H. and Modigliani, F. (1961), “Dividend Policy, Growth and the Valuation of Shares”, The Journal of Business, Vol. 34 No. 4, Oct. pp 411-433.

Nishat, M. and Irfan, C. M. (2005), “Dividend Policy and Stock Price Volatility in Pakistan”, 11th Pacific Basin Finance, Economics and Accounting Conference. Pp 1-23.

Nissim, D. and Ziv, A. (2001), “Dividend Changes and Future Profitability”, The Journal of Finance, Vol. 61 No. 6 Dec., pp 2111-2134.

Okafor, F. O. (1983), Investment Decision; Evaluation of Projects and Securities, Enugu: Gostak Publishing Company Ltd.

Pandey, I. M. (2005), Financial Management, 9th edition, New Delhi: Vikas Publishers.

Pye, G. (1972), “Preferential Tax Treatment of Capital Gains, Optimal Dividend Policy and Capital Budgeting”, The Quarterly Journal of Economics, Vol. 86, pp 226-242.

Walter, J. E. (1963), “Dividend Policy; It influence on the Value of the Enterprise”, Journal of Finance, Vol. 1 May, pp 280-291.




DOI: http://dx.doi.org/10.46827/ejsss.v0i0.245

Copyright (c) 2018 Godwin Imo Ibe

Creative Commons License
This work is licensed under a Creative Commons Attribution 4.0 International License.

The research works published in this journal are free to be accessed. They can be shared (copied and redistributed in any medium or format) and\or adapted (remixed, transformed, and built upon the material for any purpose, commercially and\or not commercially) under the following terms: attribution (appropriate credit must be given indicating original authors, research work name and publication name mentioning if changes were made) and without adding additional restrictions (without restricting others from doing anything the actual license permits). Authors retain the full copyright of their published research works and cannot revoke these freedoms as long as the license terms are followed.

Copyright © 2015 - 2018. European Journal Of Social Sciences Studies (ISSN 2501-8590) is a registered trademark of Open Access Publishing Group. All rights reserved.

This journal is a serial publication uniquely identified by an International Standard Serial Number (ISSN) serial number certificate issued by Romanian National Library. All the research works are uniquely identified by a CrossRef DOI digital object identifier supplied by indexing and repository platforms. All the research works published on this journal are meeting the Open Access Publishing requirements and standards formulated by Budapest Open Access Initiative (2002), the Bethesda Statement on Open Access Publishing (2003) and  Berlin Declaration on Open Access to Knowledge in the Sciences and Humanities (2003) and can be freely accessed, shared, modified, distributed and used in educational, commercial and non-commercial purposes under a Creative Commons Attribution 4.0 International License. Copyrights of the published research works are retained by authors.


 

Hit counter