An Assessment of Theories Underlying the Operations of the Nigerian Stock Market

Chris O. Udoka


This paper aimed at determining the theories and approaches that inform the operational efficiency of the Nigerian stock market, considering the economic, financial, political and environmental factors inducing shareholder behaviour in the market. Taking a desk review of the theories, against the wealth maximization expectations of investors, the paper notes that due to imperfections in the Nigerian stock market, certain policies are clearly unsuitable in informing shareholder behaviour and corporate managements’ relationship with them. Due to the several factors affecting dividend policy such as legal constraints, funding needs, control issue, debt obligation, investment opportunity, inflation, shareholders expectations etc, good planning must be put in place.


Dividend, Dividend payout ratio, Market efficiency, Random walk, stock market, Tax preference, shareholder behaviour, wealth maximization.

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