Mediating Effect of Profitability on the Relationship between Dividend Policy and Value of Listed Conglomerate Companies in Nigeria

AFRAG029

Mediating Effect of Profitability on the Relationship between Dividend Policy and Value of Listed Conglomerate Companies in Nigeria

Ishaq SAMAILA1 and Moses Babatunde OLANISEBE2

1Department of Accounting, Bayero University Kano

2PhD Student (Accounting), Department of Accounting, Bayero University Kano

E-mail: ishaqismail005@yahoo.com, walemose@gmail.com

Abstract

The study examines the mediating effect of profitability on the relationship between dividend policy and value of listed conglomerate companies in Nigeria. The study used secondary data which were extracted from annual reports of the sampled companies for eleven years from 2009 to 2019. The data were analyzed, using regression analysis. The result of the regression shows that dividend policy has positive significant impact on firm value of listed conglomerate companies in Nigeria. The result also shows that profitability does not significantly mediate the relationship between dividend policy and firm value. The study recommends that the management of listed conglomerate companies in Nigeria should consider Bird in the Hand Theory when taking decisions on dividend because distributing dividends constantly tend to motivate existing investors and new ones to invest in companies. Finally, finance managers of conglomerate companies in Nigeria should be diligent in the handling of dividend payout information among the sector players in a bid to ensure that there is inclusivity of the stock market stakeholders.

Keywords: DPO, ROA, FV and Conglomerate Companies

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