Abstract:
Previous studies have indicated that dividend policy remains a controversial issue in
corporate finance. Specifically, the results of prior studies on the relationship that exists
between dividend payout and organizational performance have been conflicting and
open to further research. Thus, this study examined the effects of dividend payout on
performance of manufacturing firms in Nigeria. Data were obtained from secondary
sources, particularly five (5) years audited financial statements of ten randomly selected
companies, making a total of fifty firm years. The results of the regression analysis
revealed a significant and positive relationship between dividend payout and profit after
tax on one hand; but no significant relationship between dividend payout and
shareholders’ funds on the other hand. One of the recommendations is that the boards
of directors of the manufacturing firms are to ensure that dividends payment is
sustained so as to continually boost the firms’ profitability
