Test of the Implication of Life Cycle Theory of Dividend among Firms Listed on the Nigerian Stock Exchange

Abstract

One of the recent explanations on dividend payout policies is the lifecycle theory of dividend. The theory argues that the stage of a firm in its financial life cycle is a major determinant of the firm's payout policy. However, the implications of the theory remain uncertain in the Nigerian context due to lack of empirical evidence in this regard. The main aim of this study is to examine whether the life cycle theory explains dividend payout policies of firms listed on the Nigerian Stock Exchange. To achieve this objective, firm level data were extracted from Thomson Reuter's Worldscope Database (Datastream).