Description
INTRODUCTION
This chapter covers the background of the study, the problem underlying the research, objective of the research, the significance of the study, research questions, the hypothesis and the scope and definition of terms.
All corporate organization, banks inclusive, have three major decisions to make if they must work in the interest of achieving their fundamental objectives of maximizing their shareholders’ wealth. These decisions are on the kind of investment to undertake (investment decisions) how to finance these investment (Financing decisions) and what to do with the profit realized (dividend decision) i.e. what amount of profit to be paid out as dividend to shareholders and what amount to retain for further investment purpose (Duke et’ al 2015).
Investment decision determines the total value and types of assets an organization utilizes. Financial decision determines the capital structure of the firm and forms the source on which investment decisions are made.
The third decision, dividend decision, which forms the focus of this study has to do with the determination of the dividend payout policy adopted by the firm in determining the amount of cash that is given to shareholders. These decisions are depending on whether the potential investors and shareholders alike have a preference for capital gain as opposed to income.
Therefore, corporate organization adopt dividend policy that have major aim of maximizing shareholders’ wealth or, put in better perspective, increasing their share price¬¬¬/value. The financial managers for instance to decide on whether to adopt a high payout ratio and turn around to borrow funds from the capital market for investment purposes or adopt a low payout ratio and used the retained earnings in financing the investment opportunities prevalent at that time (Oye A. 2014).
The volatility of ordinary stock is the systematic risk faced by investors who possess ordinary stock investments (Guo, 2002) it is a measure used to define risk, and represents the rate of change in the price of a security over a given time. Usually: the greater the volatility, the greater the chances of a gain or loss in investment in a short period of time. Volatility is a measure related to the variance of a securities price. Thus, if a stock is labeled as volatile, its price would greatly vary over time, and it is more difficult to say in certainty what its future price will be (Criss, 1995). Investor’s preference is for less risk the lesser the amount of risk, the better the investment is.
In other words: the lesser the volatility of a given stock, the greater its desirability to investors. (Okafor C.A 2011)
It is against this background that this study attempted to empirically investigate the share price volatility and dividend policy of firm in Nigeria with focus on banking industry specifically Guarantee Trust Bank Jalingo.
TABLE OF CONTENTS
Title Page
CHAPTER ONE
INTRODUCTION
1.1 Introduction
1.2 Background of the study
1.3 Statement of the problem
1.4 Objective of the study
1.5 Research questions
1.6 Research hypothesis
1.7 Significance of the study
1.8 Scope and limitation of the study
1.9 Definition of terms
CHAPTER TWO
REVIEW OF RELATED LITERATURE AND THEORETICAL FRAMEWORK
2.1 Introduction
2.1.2 Conceptual framework
2.1.3 The concept of share.
2.2.2 Classification of dividend policy
2.3 Factors for consideration of dividend policy:
2.3.1 General state of economic
2.3.2 Capital market
2.3.3 Legal contractual constraints and restriction
2.3.4 Tax policy/Tax consideration
2.3.5 Inflation
2.3.6 Stability of dividend
2.3.7 Dividend payout (D/P) Ratio
2.4 Share price
2.5 Share price volatility
2.6 Theoretical frame work
2.6.1 Residual theory
2.6.2 Dividend irrelevance Theory
2.6.3 The bird in the hand theory
2.7 Review of Related Literature
CHAPTER THREE
RESEARCH METHODOLOGY
3.1 Introduction
3.2 Research design
3.3 Area of the study
3.4 Population of the study
3.5 Sample size and sampling techniques
3.6 Validity and reliability of the research instrument
3.7 Source of data
3.8 Method of data collection
3.9 Techniques of data analysis
3.10 Model Specification.
CHAPTER FOUR
DATA PRESENTATION, ANALYSIS AND INTERPRETATION
4.1 Introduction
4.2 Data Analysis and Interpretation
4.3 Test of Hypothesis
CHAPTER FIVE
SUMMARY, CONCLUSION AND RECOMMENDATIONS
5.1 Restatement of problem:
5.2 Summary
5.3 Major findings
5.4 Discussion of Findings
REFERENCES