Dividend policyand share price volatility (a study of some selected deposit money Banksin Nigeria)

This paper aims to investigate the relationship that exists between Dividend Policy and Volatility of Share Prices in selected listed Manufacturing Companies in Nigeria. Furthermore, the study will test the role of Dividend pay-out ratio, Dividend yield, Asset Growth rate, Earnings Volatility and Firm Size in the relationship. Share Price Volatility was measured by considering the relative change in share prices over the years in consideration.The unresolved puzzle as regards the relationship between dividend policy and share prices variability actually engendered this study to specifically ascertain how certain components of dividend policy impact on the variability of share priceof some selected Money Deposit Banks in Nigeria. A simple random sampling was adopted in selecting a sample of ten of them. Data were collected over a period of ten (10) years (2009-2018). It was found that earnings yield, dividend yield and dividend per share have a significant relationship with stock price volatility. But it was found that return on asset has no significant relationship with stock price volatility. The study recommend the use of regression and correlation analysis in establishing the relationship that exists between the dependent and independent variables and also in accepting and rejecting the stated hypothesis.