Abstract

Shareholders’ value creation is the main objective of business organizations, but few

studies use it as the measure of performance. Companies that are conscious on

shareholders’ value creation with large amounts of excess cash at their disposal try to

create value for their investors. This study examined the determinants of shareholders’

value of listed industrial goods firms in Nigeria using multiple regression. The data of the

study was obtained from the annual reports and financial statements of the selected listed

industrial goods firms in Nigeria for a period of ten years (2007 - 2016). The data was

analysed using Generalized Lease Square method where fixed method of estimation was

chosen as the best model of the study. Shareholders’ value is proxied by market to book

value ratio while dividend payout, working capital, sales growth, return on equity and

debt are used as the determinants of shareholders’ value. The findings show that dividend

payout ratio, sales growth rate and return on equity have significant and positive

relationship with the shareholders’ value of listed industrial goods firms in Nigeria while

negative and insignificant relationship between working capital ratio, debt and

shareholders’ value of listed industrial goods firms in Nigeria was found. The study

concludes that dividend payout ratio, sales growth rate and return on equity play a vital

role in determining the shareholders’ value of listed industrial goods firms in Nigeria.

Based on the findings, the study recommends that listed industrial goods firms in Nigeria

should maximize the payment of dividend to their shareholders, sales growth and return

on equity in order to improve the shareholders’ value of the firms.

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