TY - JOUR
T1 - Dividend Policy and Shareholders’ Value
T2 - Evidence from Listed Companies in Ghana
AU - Ofori-Sasu, Daniel
AU - Abor, Joshua Yindenaba
AU - Osei, Achampong Kofi
N1 - Publisher Copyright:
© 2017 The Authors. African Development Review © 2017 African Development Bank
PY - 2017/6/1
Y1 - 2017/6/1
N2 - This study examines the effect of dividend policy on shareholder value of listed companies in Ghana. It analyses the factors affecting dividend policy and how dividend policy affects shareholders’ value. Data from 2009 to 2014 financial reports of listed companies on the Ghana Stock Exchange were used. The data was analysed using pooled OLS panel regression. The findings reveal that ROE, firm age, tax, tangibility, GDP growth and interest rate are statistically significant in explaining dividend policy. The study suggests that firms consider the use of dividend yield as an appropriate measure when making choices in dividend policy. The study finds a positive relationship between dividend per share and shareholders’ value. More so, firms with higher dividend yield tend to reduce shareholders’ value, as confirmed by a negative and significant relationship between dividend yield and shareholders’ value. It concludes that dividend policy has a strong relationship with shareholders’ value. The study recommends that managers should embark on prudent investment activities that would generate higher returns (both dividend and capital gains) to shareholders in order to increase shareholder value.
AB - This study examines the effect of dividend policy on shareholder value of listed companies in Ghana. It analyses the factors affecting dividend policy and how dividend policy affects shareholders’ value. Data from 2009 to 2014 financial reports of listed companies on the Ghana Stock Exchange were used. The data was analysed using pooled OLS panel regression. The findings reveal that ROE, firm age, tax, tangibility, GDP growth and interest rate are statistically significant in explaining dividend policy. The study suggests that firms consider the use of dividend yield as an appropriate measure when making choices in dividend policy. The study finds a positive relationship between dividend per share and shareholders’ value. More so, firms with higher dividend yield tend to reduce shareholders’ value, as confirmed by a negative and significant relationship between dividend yield and shareholders’ value. It concludes that dividend policy has a strong relationship with shareholders’ value. The study recommends that managers should embark on prudent investment activities that would generate higher returns (both dividend and capital gains) to shareholders in order to increase shareholder value.
UR - http://www.scopus.com/inward/record.url?scp=85020393216&partnerID=8YFLogxK
U2 - 10.1111/1467-8268.12257
DO - 10.1111/1467-8268.12257
M3 - Article
AN - SCOPUS:85020393216
SN - 1017-6772
VL - 29
SP - 293
EP - 304
JO - African Development Review
JF - African Development Review
IS - 2
ER -