DETERMINANTS OF SHARE PRICES OF QUOTED BANKS IN NIGERIA

This study assesses the Determinants of Share Prices of Quoted Banks in Nigeria, with particular reference to profitability, dividend payout and leverage. Ordinary least squares method of regression is used on time series data collected from the annual report of First Bank Nigeria PLC for the period often year (2003-2012) for analysis and found a positive and significant impact of profitability on share price, while a positive but insignificant impact of dividend payout on share price is revealed. Conversely, the relationship between leverage and share price is negative and insignificant. This implies that increase in profitability increases share prices, but increase in dividend payout has no significant influence on share prices as argued by dividend irrelevant theory. In the case of leverage, share prices decreases with increase in leverage but the decrease is not significant. The study recommends among others for diver sing means of exploiting investment opportunities available to the bank to improve profitability in other to increase firm’s value, and to retained earnings to plough back than paying out dividend.