DETERMINANTS OF SHAREHOLDERS' VALUE OF LISTED INDUSTRIAL GOODS FIRMS IN NIGERIA

Author: Isah, Abdullahi Ibrahim

Supervisors: Salisu Mamman and Malam Ibrahim Yusuf.

Shareholders’ value creation is the main objective of business organizations, but few studies use it as the measure of performance. Companies that are conscious on shareholders’ value creation with large amounts of excess cash at their disposal try to create value for their investors. This study examined the determinants of shareholders’ value of listed industrial goods firms in Nigeria using multiple regression. The data of the study was obtained from the annual reports and financial statements of the selected listed industrial goods firms in Nigeria for a period of ten years (2007 - 2016). The data was analysed using Generalized Lease Square method where fixed method of estimation was chosen as the best model of the study. Shareholders’ value is proxied by market to book value ratio while dividend payout, working capital, sales growth, return on equity and debt are used as the determinants of shareholders’ value. The findings show that dividend payout ratio, sales growth rate and return on equity have significant and positive relationship with the shareholders’ value of listed industrial goods firms in Nigeria while negative and insignificant relationship between working capital ratio, debt and shareholders’ value of listed industrial goods firms in Nigeria was found. The study concludes that dividend payout ratio, sales growth rate and return on equity play a vital role in determining the shareholders’ value of listed industrial goods firms in Nigeria. Based on the findings, the study recommends that listed industrial goods firms in Nigeria should maximize the payment of dividend to their shareholders, sales growth and return on equity in order to improve the shareholders’ value of the firms.