The Effect of Dividend Payment on Share Price of Listed Oil and Gas Firms in Nigeria

Abstract:

The issue of dividend payment has a long history and some dividend theories are prominent in finance literatures. This study investigates the impact of dividend policy on share price of listed companies in the stock exchange market of the Nigeria economy from 2013 to 2017 on a panel data analysis. Given the crucial impact of the oil and gas sector in Nigeria, it becomes expedient to critically analyze the impact of dividend per share and other variables proxy for dividend that are likely to affect share prices in the oil and gas sector in Nigeria. The study adopted a simple statistical methodology. Some underlining theory of dividend policy in line with the efficient market hypothesis was adopted to practically test the efficacy of the model and if the research hypothesis result corroborates with other studies. Due to the numbers of firms operating in the oil and gas sector in Nigeria, the study uses the Yamane’s formula to derive the appropriate sample size while the Kolmogorov test was used to test for normality under the OLS assumption. The variables in the model are statistically significant and the coefficient of determination is very high, indicating that the total variation in the dependent variable are explained by the independent variables in the model. Therefore, the study found out that dividend per share (DPS) affect share price (SP) in the oil and gas sector in Nigeria.