Dividend Policy and the Performance of Firms Listed on the Nigerian Stock Exchange

This study sought to assess the significance of dividend policy and suggest measures that could enhance its effectiveness on firms’ performance in Nigeria. To achieve the objective, some financial and performance indicators were evaluated. The ex-post facto research design was adopted and the data were collated, analyzed, and tested using descriptive statistics and panel data analysis techniques. Analysis revealed that without the moderating variable (corporate governance index), the dividend payout ratio was statistically insignificant both in the short-run and long-run periods. This implies that without the moderating variable, the relationship between the dividend payout ratio and firm performance is a matter of chance. While, with the moderating effect, the dividend payout ratio became statistically significant in the short run as well as in the long run indicating that the existence of a relationship between dividend payout and firm performance is not caused by chance. Also, without the moderating variable, the dividend per share was statistically insignificant in both the short and long-run periods. The investigation concluded that among the various dividend policy options considered, the dividend payout ratio is the most critical dividend policy measure that determines the performance of a firm both in the short and long-run periods. The study recommended among others that listed firms that are willing to maximize shareholders' wealth and firms value should consistently increase their dividend payout ratio as this signals that the firm is financially healthy