MODERATING EFFECT OF BOARD INDEPENDENCE ON THE RELATIONSHIP BETWEEN DIVIDEND POLICY AND STOCK PRICES OF LISTED INSURANCE FIRMS IN NIGERIA

Abstract

The study was carried out to examine the moderating effect of board independence on the relationship between Dividend policy and stock price of listed insurance companies in Nigeria. The population of this study comprises all the listed insurance companies on the Nigerian Stock Exchange (NSE) as at 31^st December, 2022, which constitutes (24) companies. Eighteen (18) companies were emerged as sample of the study after six (6) companies were filtered out based on some criteria. Data were collected from the annual reports and accounts of the sample companies for the period of the study. The data collected were analyzed using descriptive statistics, correlation and multiple regression technique. The findings of the study revealed that Dividend yield (DY) has positive and significant impact on the stock price of listed insurance companies in Nigeria. The finding further shows that dividend per share (DPS) is negative and insignificantly related to the stock price of listed insurance companies in Nigeria. Finally, the finding shows that dividend pay-out (DPO) has negative but significant relationship with stock price of listed insurance companies in Nigeria. It was also discovered that the moderating variable board independence can only moderate the relationship between dividend yield and stock price but will not moderate the relationship between DPS and DPO with stock price of listed insurance companies in Nigeria. The study therefore, concludes that dividend policy has impact in influencing the stock price of listed insurance companies in Nigeria. It is therefore recommended that the management of the insurance companies should consider enhancing its dividend policy in improving their stock prices.