211 Empirical study of dividend in Nigeria The earliest major attempt to

211 empirical study of dividend in nigeria the

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2.11 Empirical study of dividend in Nigeria The earliest major attempt to explain dividend behavior of companies has been credited to Lintner (1956) [15] who conducted this study on American company in 1950s. Since then there has been an on going debate on dividend policy in the developed market resulting in mixed, controversial and inclusive results. This issue did not receive any serious attention among academic scholars in Nigeria until 1974. Uzoaga and Alozieuwa (1974) (in Adelegan 2003) attempted to highlight the pattern of dividend policy pursued by Nigerian firms, particularly during the period of indigenization and participation programme defined in the first indiginazation Decree of 1973 their study covered 52 company- years of dividend action (13 companies for four years). They reported that they found very minimum evidences to support the classical influences that determine dividend policies in Nigeria during this period. They concluded that fear and resentment seem to have taken over from the classical forces. However, Inang (1978) and Soyode (1975) [25] commented on the work of Uzoaga and Alozieuwa. Inang (1998) concluded that the problem arising from dividend policy can be attributed to the share pricing policy of the capital issue commission (CIC), which seem to have ignored the classical factors that should have govern the pricing of equity share issues. This in turn made companies to abandon all the classical determinants of dividend policy. Soyede criticized Uzoaga and Alozieuwa‟s work on the ground that it glossed over some important determinants of optimal dividend policy; he
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International Journal of Management Excellence Volume 8 No.2 February 2017 © TechMind Research Society 962 | P a g e also questioned certain conclusions made in the study because they were inadequate or a mistaken evaluation. Furthermore, Oyejide (1976) empirically tested for company dividend policy in Nigeria using Lintner‟s model as modified by Brittian (1964), He disagreed with previous studies and reported that the variable evidence strongly support the fact that conventional devices explain the dividend policy of Nigerian public companies. Odife (1977) criticized the Oyejide study for failing to adjust to stock dividends and seem to agree with Uzoaga and Alozieuwa‟s conclusion. However, Izedonmi and Eriki (1996) using data from 1984-1989 found supporting evidence in Nigeria for Lintner‟s model. Adelegun (2003) evaluated the asymmetric information of dividend, given earnings by shareholders in Nigeria. She carried out a study on 882 firms by analyzing the dividend policy and its effect on wealth maximization on a sample of 62 quoted firms in Nigeria over a wider testing period of 1887-2000. She found a significant result and concluded that dividend policy does affect wealth maximization.
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  • Dividend, TechMind Research Society, International Journal of Management Excellence, Effect of Dividend Policies

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