ABSTRACT

 Effect of dividend policy on performance oflistedfirms was examined. The specific objectives of the study it ei e to. delei mine the extent to which Dividend Payout Ratio (DPO), Dividendper Share (DPS) and Dividend Yield (DY) affects Return on Assets (ROA) of listed firms in Nigeria. determine the extent to which Dividend Payout Ratio (DPO), Dividend per Share (DPS) and Dividend } ield (DY) affects Gross Profit Margin (GPM) oflistedfirms in Nigeria and determine the extent to which Dividend Payout Ratio (DPO),Dividend Per Share (DPS) and Dividend Yield (])}) affects 11 ofit After 'lax (PAT) of listedfirms in Nigeria. The study adopted returns on asset and relui ns on equity as its dependent variable while dividendpay-out ratio and retained earnings are its independent variable, lhe result from the analysis carried out showed that companies while making their dividendpolicy should always consider their dividendpayout vis a vis their retained earnings, since they have significant effect on their performance. The study observed a positive relationship between dividend pay-out ratio and returns on assets of the selected firms at a statistically significant level: this is because the probability value ofthe (-statistics for dividend pay-out ratio in the regression model is greater than 5%.This implies that the observed effect of dividend pay-out ratio on return on asset warrants drawing of inferences and conclusion. therefore dividend pay-out ratio has significant effect on the returns on asset ofthe selected companies. The results of the analysis made on lhe second hypothesis indicate that retained earnings associates positively and significantly with the returns on assets ofthe selected oilfirms in Nigeria. It therefore follows that the regression estimate ofdividend policies and returns on assets ofthe three selected oil companies portrays a positive influence flowing from retained earnings to returns on assets ofthe companies at 1% level ofsignificance. The third hypothesis analysis suggests that returns on equity responds positively to changes in dividendpay-out ratio. This is in consideration ofthe beta coefficient value of1.27 approximately which shows a positive effect ofdividendpay-out ratio on the variations that occur in the returns on equity ofselected oil firms at a statistical significance of 1%. It therefore suggests that the dividend policies ofthese firms are influencing their performances positively. The study also found that retained earnings associatespositively andsignificantly with the returns on equity ofthe selected oilfirms in Nigeria. This suggests that dividendpolicies ofthe three selected oil companies in this study exert positive influence on the returns on equity of the companies at 1% level of significance, lhe study recommended that dividend policies offirms should be made in strict consideration of their influence on performance and other important factors to the companies and other financial institutions in a country