^{page 319 note 2} See Lintner, J., ‘Distribution of Incomes of Corporations Among Dividends, Retained Earnings, and Taxes’, in American Economic Review (Providence, R.I.), XLVI, 05 1956, pp. 97–113,Google Scholar and ‘Dividends, Earnings, Leverage, Stock Prices and the Supply of Capital to Corporations’, in Review of Economics and Statistics (Cambridge, Mass.), 44, 08 1962, pp. 243–69.

^{page 319 note 3} See, for example, M. J. Gordon, ‘Dividends, Earnings and Stock Prices’, in ibid. 41, May 1959, pp. 99–105, and Prais, S. J., ‘Dividend Policy and Income Appropriation’, in Tew, B. and Henderson, R. F. (eds.), Studies in Company Finance (Cambridge, 1959), pp. 26–41.Google Scholar

^{page 319 note 4} Cf. Uzoaga, W. O. and Alozieuwa, J. U., ‘Dividend Policy in an Era of Indigenisation’ in The Nigerian Journal of Economic and Social Studies (Ibadan), XVI, 3, 11 1974, pp. 461–78,Google Scholar the concepts and assumptions of which, as well as the validity of some of the conclusions, have been criticised by E. L. Inanga, ‘Dividend Policy in an Era of Indigenisation: comment’, in ibid. 1975. A. Oyejide of the Department of Economics, University of Ibadan, is also carrying out an empirical study of dividend policy of a sample of Nigerian companies using Lintner's model.

^{page 319 note 5} For a detailed analysis of the structure of ownership and control of companies in Nigeria before the Indigenisation Decree, see, for example, O. Teriba, E. C. Edozien, and M. O. Kayode, ‘Some Aspects of Ownership and Control Structure of Business Enterprise in a Developing Economy: the Nigerian case’, ibid. XIV, 1, March 1972, pp. 3–26.

^{page 319 note 6} These were enterprises with paid-up capital of more than ₦400,000 or turnover in excess of ₦1,000,000. In either case, the minimum equity participation by Nigerian citizens was set at 40 per cent, but this has since been raised to 60 per cent, and the number of enterprises increased by the second Decree promulgated and passed in 1977. The enterprises specified in Section 7 of the new Decree are essentially those whose minimum annual turnover is ₦25 million and which operate in at least 10 of the 19 states of the Federation.

^{page 320 note 1} The size and flow of net corporate savings in an economy are, to a large extent, determined by the dividend payout policy adopted by corporate enterprises. This, in turn, affects the country's long-term patterns of economic growth.

^{page 320 note 2} Jessel, M. R. in Re Exchange Co. [Flitcroft's case’, 1882, 21 ch.D. 519 at p. 533.Google Scholar

^{page 320 note 3} The most powerful advocacy of this school of thought is Gordon, loc. cit.

^{page 320 note 4} See, for example, Miller, M. H. and Modigliani, F., ‘Dividend Policy, Growth and the Valuation of Shares’, in Journal of Business (South Orange, N.J.), XXXIV, 4, 10 1961, pp. 411–33.Google Scholar

^{page 320 note 5} See, for example, Florence, P. S., ‘Tests of the Validity of Some Stock Exchange Folklore’, in Three Banks Review (London), 37, 1958, pp. 3–20;Google Scholar and Walter, J. E., ‘Dividend Policies and Common Stock Prices’, in Journal of Finance (New York), XI, 03 1956, pp. 29–41,Google Scholar who identifies dividend policy diversity as one of the principal factors responsible for variations in equity share prices.

^{page 321 note 1} M. J. Gordon, ‘Optimal Investment and Financing Policy’, in ibid. XVIII, May 1963, reprinted in Home, J. van (ed.), Foundations for Financial Management (Homewood, Ill., 1966), pp. 526–34.Google Scholar

^{page 321 note 2} Equity shareholders would, of course, ultimately reap benefits from the firm's growth in the form of capital gains. Besides, earnings retention is normally considered to be one of the cheapest sources of finance to the business firm.

^{page 322 note 1} For a discussion of some of these criteria see, for example, Kayode, M. O., ‘Some Growth Factors in Certain Selected Manufacturing Firms in Nigeria’, Ph.D. thesis, University of Ibadan, 1972, pp. 83–96.Google Scholar

^{page 322 note 2} This yardstick for performance evaluation has a number of limitations, most of which derive from the historical accounting figures from which it is computed; these are essentially book values that may not necessarily represent current values. The measure has been used for want of a more realistic substitute.

^{page 323 note 1} Source: the same as for Table 1. The percentages do not always add up to 100 due to rounding.

^{page 324 note 1} Source: the same as for Table 1. The percentages do not always add up to 100 due to rounding.

^{page 325 note 1} Nigerian Breweries Limited, Annual Report, 1973 (Lagos, 1974), p. 6.Google Scholar

^{page 325 note 2} See, for example, Bates, J. and Henderson, S. J., ‘The Determinants of Corporate Saving in Small Private Companies in Britain’, in Journal of the Royal Statistical Society (London), Series A, Part 2, 1967, pp. 207–24.Google Scholar

^{page 325 note 3} What could be regarded as the ‘normal pattern of distribution’ was in investment and financial companies which were not affected. For details, see Inanga, loc. cit.

^{page 326 note 1} Onosode, G. O., ‘Indigenisation Decree and Its Implementation: patterns of shares acquisition’, in Nigeria's Indigenisation Policy. Proceedings of the 1974 Symposium Organised by the Nigerian Economic Society (Ibadan, 1974), p. 35.Google Scholar

^{page 327 note 1} For details, see Inanga, loc. cit.

^{page 327 note 2} It should, however, be noted that subjectivity in the determination of the price of unquoted shares cannot always be avoided – what is considered reasonable by one party may consequently seem unrealistic to the other. For a discussion of the types of problems involved in the valuation process, see Holt v. IRC (1953), 32 A.T.C., 402, and Inanga, E. L., ‘The Case of John Holt and Company (Liverpool) Limited versus Inland Revenue Commissioners’, in The Nigerian Accountant (Lagos), 07/09 1974, pp. 16–21.Google Scholar

^{page 327 note 3} Apart from earnings, liquidity and size of working capital are among the important determinants of dividend policy. An examination of the annual accounts of the companies shows that the working capital of most of them was very heavily depleted as a result of the upward change in the level of dividend distribution.

^{page 328 note 1} Asabia, S. O., ‘Share Valuation: the Nigerian experience’, in Nigeria's Indigenisation Policy, p. 21,Google Scholar at the time the Chairman of the C.I.C.

^{page 328 note 2} For details, see Teriba, O., ‘Financing Indigenisation’, in Quarterly Journal of Administration (Ife), 01 1975, p. 162.Google Scholar