EFFECT OF DIVIDEND PAYMENT ON CORPORATE PERFORMANCE NIGERIAN BANKS

ABSTRACT

In this research work titled “Relationship between dividend payment and corporate performance of Access Banks Plc and Guarantee Trust Bank Plc”. The researcher examined the relationship between earning per share and dividend per share of selected Nigerian banks. Evaluates the relationship between firm size and dividend per share of Nigerian banks. Examined the relationship between return on asset and dividend per share of Nigerian banks. Evaluated the relationship between net assets value per share and dividend per share of Nigerian banks. The researcher made use of only secondary data from six years annual report and accounts of the two quoted bank (Access bank Plc and Guaranty Trust Bank Plc) listed on the Nigeria stock exchange were collected and regression analysis was utilized in the data analysis. The researcher found out that there is significant relationship between earning per share and dividend per share of selected Nigerian banks. It was also discovered that there is significant relationship between firm size and dividend per share of Nigerian banks. The researcher equally found out that there is relationship between return on asset and dividend per share of Nigerian banks. The study shows that there is significant relationship between net assets value per share and dividend per share of Nigerian banks. Based on the findings the researcher recommends that Organizations should ensure that they have a good and robust dividend policy in place. This will enhance their profitability and attract investments to the organizations. Directors of corporate organizations should be made to update the records of shareholders including their next-of-kin to avoid a deliberate diversion or undue retention of unclaimed dividend warrants. Due procedures for the recognition and utilization of profit arising from investment of unclaimed dividend should be effected and properly accounted for.

CHAPTER ONE

INTRODUCTION

1.1 Background of the Study

Dividend is the return that accrues to shareholders as a result of the money invested in acquiring the stock of a given company (Eriki and Okafor 2002). While dividend policy on the other hand is concerned with division of net profit after taxes between payments to shareholders (ordinary shareholders) and retention for reinvestment on behalf of the shareholders (Kempner 1980). A difficult decision for both public and private limited companies is to determine the appropriate level of dividend to be paid to shareholders, and to decide whether or not to offer non-cash alternatives such as scrip dividends According to Davidson (1990).