Published Online:July 2026
Product Name:The IUP Journal of Applied Finance
Product Type:Article
Product Code:IJAF020726
DOI:10.71329/IUPJAF/2026.32.3.21-51
Author Name:Edward Annan and Mensah Marfo
Availability:YES
Subject/Domain:Finance
Download Format:PDF
Pages:21-51
The volatile Ghanaian stock market requires companies to make dividend decisions that enhance shareholder value (SV) in a rapidly changing market. Despite growing research, limited evidence exists on how market volatility (MV) and ownership structure (OS) moderate the relationship between dividend policy (DP) and shareholder value (SV). Using data from 33 firms listed on the Ghana Stock Exchange (GSE) and 301 respondents, this study examines these moderating effects. Structural equation modeling (SEM) with SmartPLS 4 was used to collect and analyze the data for direct and moderating effects. The findings indicate that DP has a significant positive effect on SV, whereas MV has a significant negative effect on SV. The moderation effect shows that the impact of DP on SV is significantly increased by MV and OS, indicating that dividend policy is impacted by market and ownership factors. The study is limited to firms listed, and perceptual data is used, which may not be a reflection of the firm’s financial practices. The findings suggest that managers should take into account market factors and ownership structure when making dividend policy to increase SV, while policymakers should promote transparency and disclosure as a way of instilling investor confidence. The study contributes to the literature by providing evidence from Ghana and by explicitly modeling the moderating effect of MV and OS in the relationship between DP and SV in an emerging market.
The allocation of profits between dividends and retained earnings continues to be a key issue in corporate finance due to its implications for shareholder value (SV), typically assessed using total shareholder return and market capitalization (Farooq et al., 2024; Seth & Mahenthiran, 2022).