The Impact of Dividend Policy on the Financial Performance of Nigerian Food and Beverages Industry

Abstract

This paper examined the impact of dividend policy on the financial performance of Nigeria food and beverages industry listed on the Nigeria Stock Exchange (NSE). Dividend policy has always been a source of controversies despite years of theoretical and empirical research. The key objective of this research is to determine the relationship between dividend policy and financial performance in Nigeria food and beverages industries. Five (5) firms quoted on the Nigerian stock exchange where studied. Data where gathered from the firm’s annual reports and accounts a period of five years. Single regression model was used to define the relationship between the dependent variable (financial performance) and independent variable (dividend policy) while regression analysis was also used to determine the level of impact dividend policy on financial performance. E-views was used to run the analysis. The analysis review that financial performance and dividend policy are strongly related and that it has impact on dividend policy of a firm. It is recommended however, that food and beverages companies should make sure they make dividend payment as consistence as possible without fear during expansionary period, and also maintain a steady increase in earning as well as dividend payment so as to attract a divergent group of investors.