SHARE PRICE VOLATILITY AND DIVIDEND POLICY OF FIRMS IN NIGERIA (A STUDY OF GUARANTY TRUST BANK

ABSTRACT The study was carried out to examine empirically due impact of dividend policy on the volatility of share prices of quoted manufacturing firms in Nigeria. The study adopted the ex-post facto research design. Panel data covering five (5) year period, 2018 - 2022 were collated from the published annual reports and accounts of the selected quoted manufacturing companies as well as from the NSE fact sheet. The average annual shares, we adopted as the dependent variable while the independent variables include Dividend Per Share (DPS), Dividend Payout Ratio (DPR) and Earnings Per Share (EPS) pooled ordinary least square regression analysis was employed with the help of STATA 13 statistical software package. Empirical findings revealed that DPS has positive and significant effect on share prices of firms in Nigeria. The result also shows that DPR has a negative and insignificant effect on share prices of firms in Nigeria. Furthermore, EPS has negative and insignificant effect on share prices. In addition, the ordinary lease square revealed that 85% of the variations witnessed in share price volatility of selected quoted companies are caused by changes in the independent variables. The study study therefore recommends that quoted manufacturing companies in Nigeria should ensure that their actual earnings per share rise to the predicted level so as to prevent the fall of their share prices. It also recommends for management to ensure that their companies maintains operational efficiency so as to earn reasonable profits, part of which goes to the shareholders in the form of dividend.