Managers' perception of dividend policy in Nigerian firms

This paper examines Nigerian managers' perception about dividend policy. Purposive and convenience sampling methods are used to collect data from the respondents. The results are analysed for a total of 68 responding firms. Descriptive statistics are used to analyse the data. The findings show that the main factors influencing dividend policy are the level of current earnings, the stability of earnings, and past dividend payments. Nigerian firms exhibit dividend conservatism and target the dividend per share when deciding on their disbursement level. Managers of Nigerian firms perceive that dividend policy affects firm value. Managers of Nigerian firms also express strong support for the notion of dividends as signals, moderate support for the bird-in-the-hand theory, and no support for the tax clientele and agency explanations of why firms pay dividends. The study recommends that Nigerian firms should follow a constant annual dividend, which appears to satisfy shareholders' preferences.