Corporate Liquidity and Dividend Payout of Listed Consumer Goods Companies in Nigeria

Abstract

The study examines the effect of corporate liquidity on dividend payout ratio listed consumer goods firms in Nigeria. Corporate liquidity was proxy with cash to total assets, loan to total assets, market liquidity, working capital, while dividend payout ratio represents the dependent variable of the study. The working population consists of Generalized Least Square regression technique was used, while Stata 13 was adopted as tool for the data analysis. Secondary source of data was employed and were obtained from the annual reports and accounts of the firms over the period 2009-2020. Robustness tests such as normality test of error term, multicollinearity and heteroscedasticity, Hausman specification tests were conducted to validate the results. The findings revealed that, corporate liquidity have significant positive effect on dividend payout ratio of firms. This means that increase in corporate liquidity will enhance the payment of dividend to investors. It can be concluded that the variables used suggest that there is continuous need for increased investment in liquidity if increased payment of dividend by consumer goods firms must be guaranteed. It is therefore recommended amongst others that the liquidity of firms should be increased by management through investment in liquid assets to guarantee higher returns in order to guarantee continuous payment of dividend to its shareholders.