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

Ishaq Alhaji SAMAILA 1 and Moses Babatunde OLANISEBE 2
1 Department of Accounting, Bayero University Kano
2 PhD Student (Accounting), Department of Accounting, Bayero University Kano
E-mail: ishaqismail005@yahoo.com, walemose@gmail.com

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 elven 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 taken 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
diligence 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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