ABSTRACT
The purpose of this research work is to highlight an appraisal on the effect of
dividend policy on manufacturing firms’ share value. Dividend Policy is one of the
three major policy areas of financial management since Nigeria Stock Companies
came into existence. it determine the distribution of earning between payments to
stockholders and investment or reinvestment in the firm. It could be seen as to
constitute the cash flow that accures to the stockholders. The major objective of the
study is to determine the effect of dividend policy on manufacturing firms’ share
value. Other objective is to ascertain the relationship between dividend per share and
earning per share of manufacturing firm, to ascertain the companies dividend policy
that satisfies the objectives of maximizing owners wealth. The study had a population
of forty (40) quoted manufacturing firms. Out of which a sample size of fifteen (15)
were selected using Yaro Yamani formula. The ex –post facto research design was
adopted in the study.
Three (3) hypotheses was tested using correlation co-efficient. It
was found out that there is no effect of dividend policy on manufacturing firms’ share
value, There is no significant relationship between earning per share and dividend
per share, Dividend policy satisfy the objective of maximizing owner wealth. Thus, it
is recommended that financial managers should have information on the factors in the
economy that affects the behavior of investors in their purchase of stock before any
public reissue. Nigeria Stock Exchange should maintain its reliance on the force of
demand and supply alongside its daily biding system because it tends to give the firms
a fair assessment before the public in an unstable business environment.
