DETERMINANTS OF DIVIDEND PAYOUT RATIO IN THE NIGERIAN LISTED FIRMS

The study examines the determinants of dividend payout ratio of listed firms in Nigerian Stock Exchange Market. In the light of previous studies, key explanatory variables were identified to disclose their relationship and impact on determination of dividend payout ratio. These variables are profitability, corporate tax, financial leverage and firm size. Out of 180 listed firms in Nigerian Stock Exchange, only 44 firms announced dividend payment in year 2013, these firms constitute our population for the purpose of this study. Ordinary Lease Square (OLS) multiple regression technique is adopted using secondary data extracted from the annual reports and accounts of the sampled firms. The results revealed that that corporate tax and financial leverage have positive and significant influence on DPR of listed firms in the Nigerian Stock Exchange for the 2013 year at 5% and 1% level respectively. Also found in the study was that profitability is positive but not significantly influencing DPR of the listed firms in 2013. However, firm size was found to be insignificant in the context of determining the dividend payout ratio of the listed firms studied. Therefore the study conclude that firms that have higher profit and strong access to external loan will have more preference for dividend payment while large-size firm may prefer to pay less dividends. It is recommended that the listed firms in the Nigerian Stock Exchange should always be conversant with the investors’ preference when it comes to dividend payment Nigeria and should optimally utilize the leverage component of their capital structure. The more the debt, the better the payout ratio based on the findings from this study.