The Effect of Dividend Policy on Stock Price in Nigeria

This study examines the effect of dividend policy on market value of common stocks of firms listed on the Nigeria Stock Exchange. The study is motivated by the unsolved issue on dividend policy in the financial management. Panel data set over the period of 2010-2014 was obtained from the audited annual reports and daily stock price of the selected firms listed in the Nigeria Stock Exchange which were analyzed using pooled regression, random regression model, and fixed regression model. The results of the study revealed that payout ratio (POR) has positive effect on stock price, though not significant while earnings per share (EPS) and Size has a significant positive relationship with stock price. On other hand, leverage (LEV) has a negative effect on stock price though not significant while,market to book value (MBV) has an insignificant positive effect on stock price.