ANALYSIS OF THE RELATIONSHIP BETWEEN DIVIDEND POLICY AND SHAREHOLDERS’ WEALTH IN LISTED FINANCIAL FIRMS IN NIGERIA META TITLE FOR THIS

This study examines the relationship between dividend policy and shareholders’ wealth in listed financial firms in Nigeria. The primary objective is to determine whether dividend decisions significantly influence shareholders’ wealth, measured by market price per share. Specifically, the study investigates the effects of dividend per share, dividend payout ratio, dividend yield, earnings per share, and firm size on shareholders’ wealth. An ex post facto research design was adopted, using panel data obtained from the annual reports of ten selected financial firms listed on the Nigerian Exchange Group (NGX) over a ten-year period (2013–2022). Descriptive statistics, unit root tests, correlation analysis, and panel regression techniques, including Pooled Ordinary Least Squares (OLS) and Random Effects Model, were employed for data analysis. The findings reveal that dividend per share has a strong and statistically significant positive effect on shareholders’ wealth. Firm size also shows a positive and significant relationship with market price per share. However, dividend payout ratio, dividend yield, and earnings per share do not exhibit significant influence on shareholders’ wealth during the period under review. The study concludes that dividend policy, particularly dividend per share, plays a crucial role in enhancing shareholders’ wealth in listed financial firms in Nigeria. It is therefore recommended that financial firms adopt a stable and consistent dividend payment policy to enhance market value and attract investors, while also maintaining adequate retained earnings for sustainable growth.