DIVIDEND POLICY

Dividend Policy Of Nigerian Firms As Compared To U.k Firms

Table Of Content

Table Of Content2

Chapter12

Introduction2

Background2

Purpose of study3

Problem Statement4

Hypothesis4

Chapter25

Literature Review5

Nigerian and UK Environment5

Accounting environment in Nigeria and UK7

Theoretical Aspectso f Dividend Policy13

Pattern of Dividend Distribution14

Chapter318

Research Methodology18

Questionnaire administration20

References22

Chapter1

Introduction

Background

Company dividend policy involves the periodic determination of the proportion and stability of a firm's distributable earnings payable to its equity shareholders. The variables which influence the decision, especially in developed economies, have been highlighted by the pioneering work of J. Lintner, and by the research findings of other scholars. This aspect of company financial policy in Nigeria and UK have attracted hardly any attention until recently, mainly because it was difficult to gain access to the relevant data from the predominantly foreign enterprises. It was necessary to correct the imbalance in the ownership and control of these companies, and this prompted the promulgation in I972 of the first Nigerian and UK Enterprises Promotion Decree, popularly referred to as the 'Indigenization Decree', which gave Nigerians and Uk the exclusive right to the ownership of some enterprises and greater participation than hitherto in the equity ownership of others. It is widely believed that just before this Decree became effective in April 1974, there was a marked upward change in the rate and level of dividend distribution to equity shareholders by the affected companies.

Purpose of study

The purpose of this paper will be in threefold: to present a brief survey of the literature on the conceptual and operational definitions of consensus as they relate to information disclosed in financial statement and to distinguish differences between the research reported in this paper and similar studies (Section 2); to provide in some detail evidence of a study of the needs of users in the contemporary Nigerian environment (Sections 3 and 4) so as to enrich the stock of knowledge on perceptions of users across the world; and to compare revealed preference of stakeholders in Nigeria on information items with the revealed preferences of users from developed countries based on the collective judgement of the previous studies on consensus in Section 5. Another impetus for this paper is the need to examine whether 'the information needs of a developing country are very different from those of a developed country'. A brief description of Nigeria is given to provide a background.

Problem Statement

Dividend policy of nigerian firms as compared to UK firms in the past five years. How does the dividend policy of a firm affect firm performance?

Hypothesis

In this study, an item will be selected if it met one or more of the following criteria:

The inclusion of such items in previous research studies, provided the items are relevant to a developing country.'

There is a legal obligation to disclose the item in corporate financial statements.

The item is desirable disclosure in terms of NASB standards, IASs applicable to the country, rules of Nigerian Stock Exchange (NSE)and any other rules applicable in the country during the period 1980-1984.

The item is recommended in the literature (but not previously tested empirically) as being of relevance and ...