IMPACT OF CORPORATE FINANCIAL POLICIES ON FIRM VALUE OF QUOTED INSURANCE FIRMS IN NIGERIA

Maurie Nneka NWALA (Ph.D.), John Toro GIMBA, Godwin Emmanuel OYEDOKUN (Ph.D.)

Abstract

The market place is changing rapidly and corporate policies are evolving from what it used to be in the past decade. In the early 1960’s to late 1980’s investors coveted long term financial gains and capital appreciation and were uncomfortable when firms acquire debt to finance their business however the trend has changed over time with more and more investors expecting short term gains opposed to more traditional long-term financial strategies. Therefore this paper examined the impact of corporate financial policy on firm value of insurance firms in Nigeria for the period 2011 to 2017. In carrying out this study, expost-facto research design was employed and secondary data sourced from 25 insurance annual report and Nigeria Stock Exchange factbook for the period of 7 years. Pool time series data were extracted related to dividend payout, equity issuance, debt asset, equity asset, return on asset and Tobin Q was used as proxies for firm value in this study. The findings indicate that dividend payout and equity issuance have significantly impacted on firm performance (Tobin Q), the study also stated that ROA has no significant relationship with dividend payout, equity asset, debt assets and equity issuance during the period under study. It was recommended that insurance managers should devote adequate time in designing a dividend policy that will enhance firm’s performance (ROA) and shareholder value. Again, the company should review its dividend policy in order to reduce agency cost and maximize the value of the company.

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