FINANCIAL LEVERAGE AND DIVIDEND POLICY OF LISTED INDUSTRIAL GOODS FIRMS IN NIGERIA

Abstract

This study investigated the impact of financial leverage on dividend policy of quoted

industrial goods firms in Nigeria. This paper examined the influence of debt-to-equity

ratio (DER), debt-to-asset ratio (DAR), and interest coverage ratio (ICR) on dividend

per share. Correlational research design was adopted and employed secondary panel

data obtained from the audited financial statements of ten (10) firms listed in the

Nigerian Exchange (NGX) Group. The purposive selected industrial goods firms listed

on the NGX over a ten-year period from 2015 to 2024. The random effect model was

used to analyse the data. The findings revealed that DER positively impacted DPS but

was insignificant. In addition, DAR negatively impacted DPS but was insignificant.

ICR had an insignificant but negative impact on DPS. The study concluded that

financial leverage does not significantly affect the dividend policy of quoted industrial

goods companies in Nigeria. Therefore, the study recommends that firms should opt for

a balanced capital structure, invest debt-financed assets in productive ventures and run

their operations efficiently to maintain dividend payments.