Dividend Payout Ratio and Performance of Deposit Money Banks in Nigeria
Abstract
This study examined the impact of performance on dividend payout ratio of some selected deposit money
banks in Nigeria spanning the periods between 2004 and 2013. Guided by explanatory research design,
four deposit money banks were selected and data relating to relevant variables of leverage and
profitability and dividend payout ratio were gathered. Correlation analysis and multiple regressions
were carried out to analyses the data. The findings revealed that dividend payout ratio is negatively
related to banks’ leverage and profitability. The study concludes that dividend payout ratio is inversely
related to performance of deposit money banks in Nigeria. The study recommends that deposit money
banks should consider the dividend policy of the banks if they must achieve shareholders’ wealth and
improve the consistent performance of the banks’ share prices.
Keywords: Dividend payout ratio, leverage, profitability.
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