Key Features:
No of Chapters: 5
No of Pages: 79
Methodology: Probit Binary Regression
Abstract:
In this study we investigated the determinants of dividend cut of selected non-financial companies in Nigeria. To carry out this study a more recent data for the period 2012 – 2014 was reviewed and a model with the necessary variables constructed. For seeking out the dividend cut relationship sales growth, earnings per share growth, leverage, capital expenditure and cash flow from operations were chosen. The sample size of 70 was split into 35 dividend cutters and 35 dividend non-cutters using an equal sampling technique. A probit binary regression and a Jarque-bera test was adopted in the study.
The results revealed that companies with high fixed asset investment, growing earning per share and also companies that use borrowed money to finance their fixed asset expansion are significant dividend cutters. It we therefore conclude that company would not cut their dividend but the dividend payout would be insignificant. There should be a compulsory policy on the minimum percentage in which companies should pay as dividend.
Table of Content:
CHAPTER ONE: INTRODUCTION
1.1 Background to the Study
1.2 Statement of the Research Problem
1.3 Objectives of the Study
1.4 Research Hypotheses
1.5 Scope of the Study
1.6 Significance of the Study
1.7 Limitations of the Study
CHAPTER TWO: LITERATURE REVIEW
2.1 Introduction
2.2 Conceptual Framework
2.2.1 Dividend
2.2.2 Dividend Policy
2.2.3 Dividend Payout
2.2.4 Sales Growth
2.2.5 Cash Flow from Operations
2.2.6 Capital Expenditure
2.2.7 Leverage (debt)
2.2.8 Earnings per Share
2.3 Empirical Framework
2.3.1 Introduction
2.3.2 Sales Growth and Dividend Cut
2.3.3 Leverage (debt) and Dividend Cut
2.3.4 Cash Flow from Operations and Dividend Cut
2.3.5 Capital Expenditure and Dividend Cut
2.3.6 Earnings per Share Growth and Dividend Cut
2.4 Theoretical Literature
2.4.1 The Bird in Hand Theory
2.4.2 Clientele Theories
2.4.3 Signalling Theories
2.4.4 Free Cash Flow Theory/Agency Theories
2.4.5 Theory on Self Control
2.4.6 Mental Accounting
2.4.7 The Inertia-Based Explanation For Dividends
2.4.8 Dividends as a Valuation Yardstick
2.4.9 Dividends as a Social Norm
CHAPTER THREE: METHODOLOGY
3.1 Introduction
3.2 Research Design
3.3 Population of the Study
3.4 Sample Size
3.5 Source of Data
3.6 Method of Data Analysis
3.7 Model Specification
3.8 A-priori Expectation
CHAPTER FOUR: DATA PRESENTATION AND ANALYSIS
4.1 Introduction
4.2 Descriptive statistics
4.3 Regression Results
4.3.1 Insignificant Result
4.3.2 Significant Result
CHAPTER FIVE: SUMMARY OF FINDINGS, CONCLUSION AND RECOMMENDATIONS
5.1 Introduction
5.2 Summary of Findings
5.3 Conclusion
5.4 Recommendations
5.5 Suggestion for Further Studies
5.6 Contribution of Knowledge
BIBLIOGRAPHY
APPENDIX
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