Dividend Policy and Shareholder Value in Nigerian Foods and Beverages Industry

Dividend policy has always been a source of controversy and concern despite years of theoretical and empirical research of equal concern is the effect dividend policy has on the shareholder value and whether or not shareholders portray preference towards such policy. This paper examines how dividend policy affect the value of firms quoted in the Nigerian foods and beverages industry and also assess shareholder perception towards dividend. Data was generated from the annual reports and accounts of sampled firms from the industry and also using questionnaire for information not obtainable from the reports. The generated data was analysed using multivariate regression analysis and chi-square test. The results of the analysis established a positive relationship between dividend policy and value of firms with a tilt of preference for higher dividend payouts than higher retention ratio, leading to the conclusion that low retention ratio could increase firms’ value.