Dividend Policy and Share Price of De posit Money Banks in Nigeria: The Moderating Role of Ownership Structure.
This study examines the effect of dividend policy on the share price of deposit money banks (DMBs) in Nigeria, and investigates whether managerial ownership moderates this relationship. Dividend policy is proxy by four indicators retention ratio, price-earnings ratio, cash dividend, and dividend declared – while share price is proxy by market share price. The study employs an ex-post facto correlational research design using a balanced panel of 110 bank-year observations drawn from eleven deposit money banks listed on the Nigerian Exchange (NGX) over the period 2015–2024, estimated using pooled OLS, fixed-effects, and random-effects panel regression, with moderated (interaction) regression used to test the moderating role of managerial ownership. Findings show that retention ratio and cash dividend have a significant positive effect on market share price, while price-earnings ratio has a significant negative effect; dividend declared has no significant effect. Managerial ownership has a significant direct negative effect on market share price and significantly and positively moderates the relationship between retention ratio and market share price, but does not significantly moderate the price-earnings ratio, cash dividend, or dividend declared relationships. The study concludes that dividend decisions convey information that shapes investors’ valuation of bank shares, and that managerial ownership conditions this relationship selectively rather than uniformly across dividend policy proxies. The study contributes to the corporate finance and governance literature by integrating ownership structure as a boundary condition in the dividend–valuation nexus within an emerging market banking context, and offers policy-relevant recommendations for bank management, regulators, and investors in Nigeria.
Keywords: Dividend Policy, Retention Ratio, Price-Earnings Ratio, Cash Dividend, Dividend Declared, Market Share Price, Managerial Ownership, Deposit Money Banks, Nigeria
