Abstract

The study analysed dividend policy as a tool for shareholders wealth maximization in Nigerian firms with respect to Lafarge cementpic and Dangote cementpic. Secondary data on shareholders fund growth rate, dividend pay-out and retention rate were collectedfrom the annual report of Lafarge cement pic and Dangote cement pic. From 2007 to 2018. Multiple regression was used to analyse the hypothesisformulated andfrom the result ofthe analysis, the findings show that i) dividend pay-out does not have any effect on the shareholders ’ wealth maximization of cement manufacturing companies, ii) retention rate significantly affect the shareholders’ wealth maximization ofcement manufacturing companies. The study concluded that the dividendpolicy ofafirm has an impact on its shareholders ’ wealth as supported by the Dividend Relevance theory which explains that dividendpolicy has significant effect on shareholders’ wealth as well asfirms’ value. The study recommends that Nigerian manufacturingfirmsshould operate a dividendpolicy that tends to satisfy the need ofshareholders as well as the investment need ofthe firm. Thus, a portion ofthe earnings ofa firm should be paid as dividend while a portion is also retainedfor further investments, equally, during a depressed economy, dividend declaration should be reduced to be able to have enoughfund to plough back into the firm to avoid collapse. The asset base and revenue strength of every firm are stronger attractions to investors. Investors make informed investment decisions which dividendpayment is less thefocus. The management should be skilful enough to engage into the right priorities in place in other to give value to shares appropriately whenever there is increase.